Question

Jennifer has $1200 to invest in an account paying 5% interest compound yearly?She plans to keep the money in the account for 6 years. Approximately,how much money would Jennifer have an account at the end of the 6th year?

Answer 1

Answer:

Jennifer will have $1608 in the account at the end of the 6th year.

Step-by-step explanation:

The compound interest formula is given by:

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

Where A is the amount of money, P is the principal(the initial sum of money), r is the interest rate(as a decimal value), n is the number of times that interest is compounded per unit t and t is the time the money is invested or borrowed for.

In this problem, we have that:

$P = 1200, r = 0.05, t = 6, n = 1$

So

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

$A = 1200(1 + \frac{0.05}{1})^{1*6}$

$A = 1608$

Jennifer will have $1608 in the account at the end of the 6th year.