Suppose your​ friend's parents invest $20,000 in an account paying 5% compounded annually. What will the balance be after6 ​years?

Answer 1

A = A₀(1 + r/n)^nt. We have A₀ = $20000; n = 1, r = 5% = 0.05, t = 6 years

A = 20000(1 + 0.05)⁶ = $26801.91

Answer 2

A = P(1+r/n)^nt

P = 20000, n = 1, r = 0.05, t = 6

A = 20000(1.05)⁶ = $26801.91

Answer 3

Hi Xavier C.

Try this online or on your calculator

A = P(1 +r/n)^nt

A = Amount

P = Principal ( Amount Invested)

r = interest rate (written as a decimal)

n = number of times interest is compounded per unit t

t = time in years

I got $26,801.91