John opened a savings account that earns 2.25% interest compounded yearly. If he deposited 80 in the account when he opened it and did not make any other deposits, how much money was in the account after 5 years, rounded to the nearest cent?

Solution

Solution

Amount : 89.41

Solution steps

Translate the problem into an equation:

A = 80 (1 + \frac{0.0225}{1})^{1 \cdot 5}

80 (1 + \frac{0.0225}{1})^{1 \cdot 5} = 89.41421 \dots

Round to the nearest hundredth:

89.41

Amount : 89.41

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