Answer:
If simple interest: $5,300
If compounding interest: $5,304.50
Step-by-step explanation:
**As you haven't specified if the interest is simple or compounding, I have provided both**
Simple interest
[tex]\sf Formula:A = P(1 + rt)[/tex]
where:
- A = final amount
- P = principal
- r = interest rate (in decimal form)
- t = time (in years)
Given:
- P = 5000
- r = 3% = 0.03
- t = 2
Substituting the given values into the formula and solving for A:
[tex]\implies \sf A = 5000(1 + 0.03 \cdot 2)[/tex]
[tex]\implies \sf A = 5000(1.06)[/tex]
[tex]\implies \sf A = 5300[/tex]
Compound interest
[tex]\sf Formula:A=P(1+\frac{r}{n})^{nt}[/tex]
where:
- A = final amount
- P = principal
- r = interest rate (in decimal form)
- n = number of times interest applied per time period
- t = number of time periods elapsed
Given:
- P = 5000
- r = 3% = 0.03
- n = 1
- t = 2
Substituting the given values into the formula and solving for A:
[tex]\implies \sf A=5000(1+\frac{0.03}{1})^2[/tex]
[tex]\implies \sf A=5000(1.03)^2[/tex]
[tex]\implies \sf A=5304.5[/tex]
