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Popular Word Problems >

Albert has 1,000 in an account. The interest rate is 5% compounded annually.To the nearest cent, how much interest will he earn in 4 years?

Solution

A l b er t ha s 1, 000 in an a cco u n t . T h e in t eres t r a t e i s 5% co m p o u n d e d ann u a ll y . T o t h e n e a res t ce n t, h o w m u c h in t eres t w i ll h e e a r n in 4 ye a rs ?

Solution

Interest : 215.51

Solution steps

Translate the problem into an equation:

1215.50625 = 1000 + I

Solve for

I, 1215.50625 = 1000 + I : I = 215.51

Interest : 215.51

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