If $5000 is deposited at 6% compounded annually, what will be the total on deposit? how much is the interest?
what is the equation or the formula to this problem. And can you please show me the solution. thanks
2007-07-07 05:28:12 · 4 answers · asked by Dariel J 2 in Science & Mathematics ➔ Mathematics
oh i forgot to put the number of years: its 6 years
2007-07-07 05:39:19 · update #1
this problem is for compound interest
2007-07-07 05:47:43 · update #2
The number of years has not been specified.
The formula is:
A = P(1+r)^t
After t years the amount will be
A = $5000*1.06^t
The interest will be Amount-Principal or
I = A-P
I = $5000*1.06^t - $5000
---------
t = 6 years
A = $5000*1.06^6
= $7092.60 (to the nearest cent)
I = A-P
= $7092.60 - $5000
= $2092.60
2007-07-07 05:33:25 · answer #1 · answered by gudspeling 7 · 0⤊ 0⤋
Interest = Principal x rate x time /100
principal = $5000
rate =6%
time =1yr
interest = 5000 x 6 x1/100
interest = $300 since the two zeros of the 5000 divides into
that of the100
so interest = $300
2007-07-07 12:36:16 · answer #2 · answered by Psygnosis 3 · 0⤊ 1⤋
(1.06)^n is the formula to be used to multiply the principal when deposited for n years.
5000 x 1.06 = 5300 after 1 year ( 300 is the interest)
5300 x 1.06 = 5618 after 2 years (318 is the interest in second year and the total interest is 618).
2007-07-07 12:35:24 · answer #3 · answered by Swamy 7 · 0⤊ 0⤋
you need a timeframe
2007-07-07 12:37:05 · answer #4 · answered by madgooner 4 · 1⤊ 0⤋