Question

Troy and his wife Angela put $5,000.00 of their savings into a bank account earning 7.25% interest. How much will Trey and Angela have in all after 3 years?

Answer 1

6,168.25 by using compound interest and not simple interest

Answer 2

After the first year, they will have
5000*(1.0725) = 5362.5
After the second year, they will have
5362.5*(1.0725) = 5751.28125
After the third year, they will have
5751.28125 * (1.0725) = 6168.24914063

This can also be simply calculated as
5000 * (1.0725)^3 = 6168.24914063