solve the by using by using compound interest, If Josh invests 500 in a 5-year fixed interest savings bond that pays 5% per annum, how much will his entire investment be worth at the end of the term? by using compound interest

Solution

so l v e t h e b y u s in g b y u s in g co m p o u n d in t eres t, I f J os h in v es t s 500 in a 5 - ye a r f i x e d in t eres t s a v in g s b o n d t ha t p a ys 5% p er ann u m, h o w m u c h w i ll hi s e n t i re in v es t m e n t b e w or t h a t t h e e n d o f t h e t er m ? b y u s in g co m p o u n d in t eres t

Interest : 138.14

Solution steps

Translate the problem into an equation:

638.14 = 500 + I

Solve for

I, 638.14 = 500 + I : I = 138.14

Interest : 138.14