Answer:
At the end of the five years you will have $20698.26 in your bank account from which $3698.26 correspond to the interest earned during the five years.
Step-by-step explanation:
We need to take into account the following formulas
Compound interest for a principal is:
Future value of a serie is:
To know the savings after five years we have to add the compund interest for principal with the future value of a serie.
Where:
A = future value wih of the loan with interest
P = Principal Investment
PMT = Monthly payment
r =annual interest rate (decimal)
n = The number of times that interest is compounded per unit of time
t = Time the money is invested
So we have that
P = $5000 PMT = $200 r = n= 12 t = 5
Replace the values
Solve it
At the end of the five years you will have $20698.26 in your bank account
To know the total interest earned during the five year we have to substract the total (A) with the initial investment (P) and the aditions during the five years (MA)
I = A - (P+MA)
A = $20698.26 P = 5000 MA = (12x5x200) = $12000
Replace
I = 20698.26 - (5000 + 12000)
I = 20698.26 - (17000)
I = 3698.26
The total interest earned during the five years were $3698.26