Answer:
To find the account balance after 5 years, we need to calculate the compound interest earned during this period. The formula for compound interest is:
A = P × (1 + r/n)^(nt)
where:
A = the final amount of the investment
P = the principal investment amount ($1000)
r = the annual interest rate (7.2%)
n = the number of times that interest is compounded per year (1)
t = the number of years the investment is held (5)
So, plugging in the values into the formula, we get:
A = 1000 * (1 + 0.072/1)^(1 * 5)
A = 1000 * (1.072)^5
A = 1000 * 1.44444444
A = $1444.44
So, the account balance after 5 years would be $1444.44.