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If you deposit $4,000 in a bank account that pays 6% interest annually, how much will be in your account after 5 years? Do not round intermediate calculations. Round your answer to the nearest cent.

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Answer:

Present value (P) = $4,000

Interest rate (r) = 6% = 0.06

Number of years (n) = 5 years

FV = P(1 + r)n

FV = $4,000(1 + 0.06)5

FV = $4,000(1.06)5

FV = $4,000 x 1.338225578

FV = $5,353

Explanation:

The future value of the investment is a function of present value multiplied by 1 + interest rate raised to power number of years.