Question

You deposit $1,000 in the bank and leave it for five years at 3 percent annual interest, making no additional transactions on this account. At the end of the five years, you withdraw the principal and any accumulated interest; the amount you would withdraw would be ________.

Answer 1

Answer:

$1,159.27

Step-by-step explanation:

$1000 * 3%= 30     $1,030

$1,030 * 3%=30.9      $1,060.9

$1,060.9 * 3%=31.83   $1,092.73

$1,092.73 * 3%=32.78    $1,125.51

$1,125.51 * 3%=33.76        $1,159.27

Answer 2

Answer: you would withdraw $1150

Step-by-step explanation:

We would apply the formula for determining simple interest which is expressed as

I = PRT/100

Where

I represents interest paid on the amount deposited.

P represents the principal or amount deposited.

R represents interest rate

T represents the duration in years.

From the information given,

P = 1000

R = 3%

T = 5 years

I = (1000 × 3 × 5)/100 = $150

The amount that you would withdraw including principal and interest would be

1000 + 150 = $1150