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1 answer:
Answer:
Final value=$134.01
see the explanation
The image in the attached figure
Step-by-step explanation:
we have that
Current principal*(0.05) Interest rate=Interest
Current principal+ Interest=New principal
Part 1) Year 2
we have
Current principal=$105
Interest=$5.25
substitute the given values to calculate the New principal
New principal=$105+$5.25=$110.25
Part 2) Year 3
we have
Current principal=$110.25
Find the interest
Interest=Current principal*(0.05) Interest rate
substitute
Interest=$110.25*(0.05)=$5.51
Find the New principal
New principal=Current principal+ Interest
substitute
New principal=$110.25+ $5.51=$115.76
Part 3) Year 4
we have
Current principal=$115.76
Find the interest
Interest=Current principal*(0.05) Interest rate
substitute
Interest=$115.76*(0.05)=$5.79
Find the New principal
New principal=Current principal+ Interest
substitute
New principal=$115.76+ $5.79=$121.55
Part 4) Year 5
we have
Current principal=$121.55
Find the interest
Interest=Current principal*(0.05) Interest rate
substitute
Interest=$121.55*(0.05)=$6.08
Find the New principal
New principal=Current principal+ Interest
substitute
New principal=$121.55+ $6.08=$127.63
Part 5) Year 6
we have
Current principal=$127.63
Find the interest
Interest=Current principal*(0.05) Interest rate
substitute
Interest=$127.63*(0.05)=$6.38
Find the Final Value
Final Value=Current principal+ Interest
substitute
Final value=$127.63+ $6.38=$134.01
The image in the attached figure
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