Question

An employee put $5,000.00 in a retirement account that offers 9% interest compounded annually. The employee makes no additional deposits or withdrawals. Which amount is closest to the interest the employee will have earned at the end of 5 years?

Answer 1

the answer would be $2693.12

Explanation:

Answer 2

Answer:
D) $2693.12
Explanation:
The account balance is multiplied by 1.09 each year, so at the end of 5 years, it has been multiplied by 1.53862395....
After subtracting the initial deposit amount, the remainder is the interest earned:
... $5000×(1.53862395 -1) = $5000×0.53862395 ≈ $2693.12