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# How much money will 500 dollars accumulate over 20 years at 5 percent interest?

That depends on whether you are getting 5% simple interest, or compound interest, and how often it is compounded. Simple interest is very easy to calculate; you just multiply. \$500 at 5% earns 5% of \$500 every year, which is \$25, so in 20 years the interest earned is 20 x \$25 or \$500, for a total of \$1,000. But if you put the money in a savings account in a bank, you get compound interest. It can be compounded annually, semi-annually, quarterly, monthly, or daily. The more often it is compounded, the more you earn. Nowadays you can get daily interest, but that is kind of complicated because it depends on whether you figure the interest for every single day, 365 days a year and 366 in a leap year, or the traditional banking custom of 360 days a year. For example, if you compound annually, every year your balance is multiplied by 1.05, so after 20 years you would have 500 x 1.0520, which is \$1.326.65 to the nearest cent. Study guides

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## A number a power of a variable or a product of the two is a monomial while a polynomial is the of monomials

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