John opened a savings account that earns 2.25% interest compounded yearly. If he deposited 80 in the account when he opened it and did not make any other deposits, how much money was in the account after 5 years, rounded to the nearest cent?

Solução

J o hn o p e n e d a s a v in g s a cco u n t t ha t e a r n s 2.25% in t eres t co m p o u n d e d ye a r l y . I f h e d e p os i t e d 80 in t h e a cco u n t w h e n h e o p e n e d i t an d d i d n o t mak e an y o t h er d e p os i t s, h o w m u c h m o n ey w a s in t h e a cco u n t a f t er 5 ye a rs, ro u n d e d t o t h e n e a res t ce n t ?

Amount : 89.41

Passos da solução

Translate the problem into an equation:

A = 80 (1 + \frac{0.0225}{1})^{1 \cdot 5}

80 (1 + \frac{0.0225}{1})^{1 \cdot 5} = 89.41421 \dots

Round to the nearest hundredth:

89.41

Amount : 89.41