Answer:
The balanced amount is $3130.25.
Step-by-step explanation:
Given : Lily provider a loan of $2500 to David that had an annual interest rate of 4.6%.
To find : The balance after 5 years if it compounded yearly ?
Solution :
Using compound interest formula,
![A=P(1+\frac{r}{n})^{nt}](https://tex.z-dn.net/?f=A%3DP%281%2B%5Cfrac%7Br%7D%7Bn%7D%29%5E%7Bnt%7D)
Where, P=$2500 is the principal
r=4.6%=0.046 is the interest rate
t=5 years
Substitute the values,
![A=2500(1+\frac{0.046}{1})^{5\times 1}](https://tex.z-dn.net/?f=A%3D2500%281%2B%5Cfrac%7B0.046%7D%7B1%7D%29%5E%7B5%5Ctimes%201%7D)
![A=2500(1.046)^{5}](https://tex.z-dn.net/?f=A%3D2500%281.046%29%5E%7B5%7D)
![A=2500\times 1.2521](https://tex.z-dn.net/?f=A%3D2500%5Ctimes%201.2521)
![A=3130.25](https://tex.z-dn.net/?f=A%3D3130.25)
Therefore, the balanced amount is $3130.25.