Question

Eugenio deposits $3,000 in an account that earns a 4% interest. The amount A in the account t years from now can be found using the formula A=P(1+r)ᵗ, where P is the principal (starting amount) and r is the interest rate, written as a decimal. After 5 years, how much is in the account?

A) $3,500.80
B) $3,249.60
C) $3,865.92
D) $3,144.00

Answer 1

The amount in Eugenio's account after 5 years is approximately C)$3,649.95.

Step-by-step explanation:

To find the amount in Eugenio's account after 5 years, we can use the formula for compound interest: A = P(1+r)^t. In this case, the principal (starting amount) P is $3,000, the interest rate r is 4% or 0.04, and the time t is 5 years. Plugging these values into the formula gives:

A = $3,000(1+0.04)^5

A = $3,000(1.04)^5

A = $3,000(1.21665)

A ≈ $3,649.95

The amount in the account after 5 years is approximately $3,649.95. Therefore, the correct answer is option C) $3,865.92.