Question

Sami opens an account with a principal balance of $3,200. The

Answer 1

Answer:

$835.71

Step-by-step explanation:

To solve this problem, we will use the compound interest formula:

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

P = initial balance

r = interest rate (decimal)

n = number of times compounded annually

t = time

First, lets change 4.75% into a decimal:

4.75% -> $\frac{4.75}{100}$ -> 0.0475

Now, plug the values into the equation:

$A=3,200(1+\frac{0.0475}{1})^{1(5)}$

$A=4,035.71$

Lastly, subtract A from the principal:

$4,035.71 - 3,200 = 835.71$

The interest earned is $835.71