A principal of $500 is invested in an account at 7% per year compounded annually. What is the total amount of money in the account after 5 years?

1 Answer
Redmond ยท Stefan V.
May 31, 2018

500(1+0.07/1) ^5 = 701

Explanation:

The compound interest formula is below.

![https://www.thecalculatorsite.com/articles/finance/http://compound-interest-formula.php](https://useruploads.socratic.org/lGUG0xoStiuNvcYbiPWW_download.png)

The principal is $500, the interest rate is 7% expressed as 0.07 as a decimal. It is compounded annually (once a year) and it was compounded 5 times because it was compounded annually for 5 years.

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