Answer:
$8,328.65
Step-by-step explanation:
First we need take the number of deposits and add the amount to the initial amount in the account.
$50 x 12Months = $600
Initial Amount = $5,000
Now we convert the interest rate into decimal to make things easier.
0.95% = 0.0095
Now that we have the principal amount, we can then use the formula .
We need to keep in mind that the value for time will have to stay in a constant value as the total deposits each year will affect the amount.
Now let's begin with the amount for the first year:
.
A = 5,600 ( 1.0095 )
A = 5,653.20 Year 1
Now let's proceed to the next year. Remember that the deposits that Eliot make total at $600 each year.
P = 5,653.20 + 600
P = 6,253.20
Now we can proceed to calculate for the amount of the second year:
[tex]A = 6253.2 (1.0095)^{1}[/text]
A = 6,253.2 ( 1.0095 )
A = 6,312.61 Year 2
Now let's proceed doing the same process until the 5th year.
Year 3 Computation:
P = 6,312.61 + 600
P = 6,912.61
[tex]A = 6912.61 (1.0095)^{1}[/text]
A = 6978.28 Year 3
Year 4 Computation:
P = 6,978.28 + 600
P = 7,578.28
[tex]A = 7,578.28 (1.0095)^{1}[/text]
A = 7,650.27 Year 4
Last but no the least year 5.
P = 7,650.27 + 600
P = 8,250.27
[tex]A = 8,250.27 (1.0095)^{1}[/text]
A = 8,328.65 Year 5
So now we can conclude that at the end of year 5, Eliot will have a total of:
$8,328.65 in his account.