Question

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Answer 1

∵ The formula of the compound interest is

$A=P(1+\frac{r}{n})^{nt}$

→ A is the new amount

→ P in the initial amount

→ r is the interest rate in decimal

→ n is the number of periods

→ t is the time

∵ The initial amount is 800 dollars

∵ The annual rate is 3% = 3/100 = 0.03

∵ It is a compounded annually

∴ n = 1

∵ t = 5 years

→ Substitute all of these values in the formula above

$\begin{gathered} A=800(1+\frac{0.03}{1})^{1(5)} \\ A=800(1+0.03)^5 \end{gathered}$

→ Use the calculator to find the answer

∴ A = 927.4192594 dollars