5. Melanie put $5000 in a savings account that pays 1.25% interest compounded yearly. How much money will be in the account 10 years later if she makes no more deposits or withdrawals?

Answer: $5661 will be in the account 10 years later

Step-by-step explanation:

We would apply the formula for determining compound interest which is expressed as

A = P (1+r/n) ^nt

Where

A = total amount in the account at the end of t years

r represents the interest rate.

n represents the periodic interval at which it was compounded.

P represents the principal or initial amount deposited

From the information given,

P = 5000

r = 1.25% = 1.25/100 = 0.0125

n = 1 because it was compounded once in a year.

t = 10 years

Therefore,

A = 5000 (1 + 0.0125/1) ^1 * 10

A = 5000 (1.0125) ^10

A = 5000 (1.0125) ^10

A = $5661