A bank account starts with $5000 and earns 4% interest annually. After one year, $1000 is withdrawn. What is the balance after the withdrawal?

Sun, 03 May 2026 13:43:07 +0000

**How a Bank Account Starts with $5,000 and Earns 4% Annual Interest Becomes Worth $6,000—or $4,500—After One Year, When $1,000 Is Withdrawn** Why is a simple Savings account setup—beginning with $5,000 and earning 4% interest a year—so compelling in today’s financial climate? With rising inflation and shifting savings habits, more people are exploring how even modest deposits grow quietly but reliably. This scenario reveals both the power of compounding and the practical reality of managing money after early withdrawals—without activating any shock value or trigger words. Financial trends show growing interest in accessible, beginner-friendly banking tools. A foundation of $5,000 earning 4% annual interest yields approximately $200 in one year. But withdrawing $1,000 mid-year changes the math—creating a balance that reflects both growth and immediate liquidity needs. Understanding this subtle shift helps clarify real-world savings planning. **The Math: What Happens to Your Balance When $1,000 Is Withdrawn?**