Question

Krystal invested $12,000 in an account that pays 5% annual compound interest. Krystal will not make any additional deposits or withdrawals. How much will be in Krystal's account at the end of the two years?

Answer 1

Using the compound interest formula A = P(1 + r/n)^(nt), where P=$12,000, r=5%, n=1, and t=2, Krystal's account will have $13,230 at the end of two years.

Step-by-step explanation:

To find out how much will be in Krystal's account at the end of two years with an initial investment of $12,000 at 5% annual compound interest, you can use the formula for compound interest A = P(1 + r/n)^(nt), where:

• A is the amount of money accumulated after n years, including interest.
• P is the principal amount (the initial amount of money).
• r is the annual interest rate (decimal).
• n is the number of times that interest is compounded per year.
• t is the time the money is invested for, in years.

In Krystal's case, P is $12,000, r is 0.05 (5% expressed as a decimal), n is 1 (since it's compounded annually), and t is 2. Using these values in the formula:

A = $12,000(1 + 0.05/1)^(1*2)

A = $12,000(1 + 0.05)^(2)

A = $12,000(1.05)^(2)

A = $12,000 * 1.1025

A = $13,230

Therefore, at the end of two years, Krystal's account will have $13,230.

Answer 2

$13230

Step-by-step explanation:

Step one:

given data

principal= $12,000

rate= 5%= 0.05

time = 2years.

Step two;

the compound interest formula is

A= P(1+r)^t

substituting we have

A=12000(1+0.05)^2

A=12000(1.05)^2

A=12000*1.1025

A=13230

Krystal's account at the end of the two years will be $13230