Answer:
1) Total amount = $6149.35
2) Interest amount = $1149.35
Step-by-step explanation:
Given : Compound interest problem- $5,000 at 3% for 7.0 years,compounded annually.
To find :
1) Total Amount = $
2) Interest Amount =$
Solution :
Using compound interest formula,
[tex]A=P(1+r)^t[/tex]
Where A is the amount
P is the principle P=5000
r is the rate r=3%=0.03
t is the time t= 7 years
Substitute the value,
[tex]A=P(1+r)^t[/tex]
[tex]A=(5000)(1+0.03)^7[/tex]
[tex]A=(5000)(1.03)^7[/tex]
[tex]A=5000\times 1.2298[/tex]
[tex]A=6149.35[/tex]
Total amount = $6149.35
Interest amount = Total amount - Principle
Interest amount =$6149.35 - $5000
Interest amount = $1149.35
