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 · 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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