Kristen deposits $5,000 in the bank today. She will be earning 6% interest annually on her deposit. How much money will she have in the bank at the end of 5 years? (Round to the nearest dollar).

Question

Quizplus · Accepted Answer

The future value of the deposit can be calculated using the formula for compound interest: FV = P(1 + r)^n, where P is the principal amount ($5,000), r is the annual interest rate (0.06), and n is the number of years (5). Plugging in the values, FV = 5000(1 + 0.06)^5 = 5000(1.338225) ≈ $6,691.

Kristen Deposits $5,000 in the Bank Today