Question

Bonnie deposited $1000 in an investment account on the first of January in 2001. The account pays 7.2% interest compounded annually. How much is the investment worth at the end of 2005? please help, having a mental break down over my math homework <3

Answer 1

Answestream wonder

Explanation:

k 9

Answer 2

About $1415.71

Explanation:

We can use the formula for compound interest, given by:

`\displaystyle A=P(1+(r)/(n))^(nt)`

Where P is the initial amount, r is the rate, n is the number of times compounded annually, and t is the time in years.

Our initial amount is the $1000 Bonnie deposited. So, P = 1000.

Our rate is the interest, which is 7.2% of 0.072. So, r = 0.072.

Since it is compounded annually, our n = 1. So, we have:

`A=1000(1+0.072)^t`

We want the amount after 5 years. So, t = 5. Substitute and evaluate:

`A=1000(1.072)^5\approx\$1415.71`

The investment will be worth about $1415.71 after 5 years.