gabrielle deposited $5,000 in an account earning 5% interest compounded annually. to the nearest cent, how…

gabrielle deposited $5,000 in an account earning 5% interest compounded annually. to the nearest cent, how much interest will she earn in 5 years? use the formula b = p(1 + r)^t, where b is the balance (final amount), p is the principal (starting amount), r is the interest rate expressed as a decimal, and t is the time in years.

gabrielle deposited $5,000 in an account earning 5% interest compounded annually. to the nearest cent, how much interest will she earn in 5 years? use the formula b = p(1 + r)^t, where b is the balance (final amount), p is the principal (starting amount), r is the interest rate expressed as a decimal, and t is the time in years.

Answer

Explanation:

Step1: Identify values

$p = 5000$, $r=0.05$, $t = 5$

Step2: Calculate final balance

$B=p(1 + r)^t=5000\times(1 + 0.05)^5=5000\times1.05^5$ $1.05^5=1.05\times1.05\times1.05\times1.05\times1.05 = 1.27628$ $B = 5000\times1.27628=6381.4$

Step3: Calculate interest

Interest $=B - p=6381.4-5000 = 1381.4$

Answer:

$1381.40$