Question

Matthew invested $5000 in an account that earns 3.8% interest, compounded annually. The formula for compound interest is A(t) = P(1 + i)t. How much did Matthew have in the account after 3 years?

A. $6900.00
B. $5594.37
C. $5570.00
D. $5591.93

Answer 1

Yup D Is Right Because if you divide by 3.8% * 5000 you get d

Answer 2

D. $5591.93.

Explanation:

We have been given that Matthew invested $5000 in an account that earns 3.8% interest, compounded annually.

We will use compound interest formula to solve our given problem.

`A=P(1+(r)/(n))^(nt)`, where,

A = Final amount after t years,

P = Principal amount,

r = Annual interest rate in decimal form,

n = Number of times interest is compounded per year,

t = Time in years.

Let us convert our given interest rate in decimal form.

`3.8\%=(3.8)/(100)=0.038`

Upon substituting our given values in above formula we will get,

`A=\$5000(1+(0.038)/(1))^(1*3)`

`A=\$5000(1+0.038)^(3)`

`A=\$5000(1.038)^(3)`

`A=\$5000*1.118386872`

`A=\$5591.93436\approx \$5591.93`

Therefore, Matthew will have an amount of $5591.93 is his account after 3 years and option D is the correct choice.