Answer:
$2,856.80
Step-by-step explanation:
The formula for the balance of an account earning interest compounded annually is ...
A = P(1 +r)^t . . . . where P is the principal invested at annual rate r for t years
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Using the given values, we find the account balance to be ...
A = $8400(1 +0.05)^6 ≈ $11,256.80
The excess over the initial investment is the interest earned:
$11,256.80 -8,400 = $2,856.80
The account has accrued $2,856.80 in interest after 6 years.
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Additional comment
If the account earns simple interest, it is computed using ...
I = Prt = $8400(0.05)(6) = $2,520
