Question
5,000 dollars is placed in a savings account with an annual interest rate
of
equation represents how much will be in the account after 6 years?
Answer
of
equation represents how much will be in the account after 6 years?
Answer
Ask by Young Love. in the United States
Mar 21,2025
Upstudy AI Solution
Tutor-Verified Answer
Answer
Solution
-
The compound interest formula for a principal amount
with annual interest rate over years is given by: -
Here,
, (which is expressed as a decimal), and . -
Substituting these into the formula:
-
Therefore, the correct equation representing the amount in the account after 6 years is:
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Simplify this solution The Deep Dive
When you place money into a savings account, it earns compound interest, which is a fantastic way to grow your savings over time! In this case, the correct equation to calculate how much you’ll have after 6 years with a 3% interest rate is
To ensure that your savings grow as expected, it’s vital to regularly check your account and understand how compound interest works. Mistakes happen when people mistakenly assume that simply multiplying their principal by the interest rate is enough. Remember, the magic of compounding happens when you use the equation
