You deposit $1500 in a savings account that pays interest at an annual rate of 6%. No money is added to or withdrawn from the account. How much will be left after 5 years?

Question

You deposit $1500 in a savings account that pays interest at an annual rate of 6%. No money is added to or withdrawn from the account. How much will be left after 5 years?

Answer 1

Use the compound interest formula A = P(1+r)^t where

1. A --> Total Value
2. P --> Principal/Initial Value ($1500)
3. r --> Interest Rate (0.06 or 6% per year)
4. t --> Time (5 years)

A = 1500(1+0.06)⁵

A = 1500(1.06)⁵

A ≈ $2007.34

Therefore, about $2007.34 will be left in the account. Hope this helped!

Answer 2

This is a great question! To solve it, we'll need to use a simple compound interest formula. The formula is: FV = P(1 + r/n)^(nt), where FV is the future value, P is the present value, r is the interest rate, n is the number of times the interest is compounded per year, and t is the number of years. In this case, the present value is $1,500, the interest rate is 6%, the number of times the interest is compounded per year is 1, and the number of years is 5.

Awesome! Now we can plug in the numbers and solve for the future value. So, the equation becomes: FV = $1,500(1 + 0.06/1)^(1*5). When we plug that into a calculator, we get $2,046.09. So the answer is that there will be $2,046.09 left in the account after 5 years. Do you want me to teach you more on this