Question

Ana deposits $1,000 in a savings account that earns 4% interest annually. Which of the following equations models the amount of money, A, she’ll have in 5 years?

A. A = 1000(1 + 0.04)^5
B. A = 1000(1 - 0.04)^5
C. A = 1000(1 + 0.04/5)^5
D. A = 1000(1 + 0.04)^5

Answer 1

The equation that models the amount of money, A, Ana will have in 5 years is A = 1000(1 + 0.04)^5.

Step-by-step explanation:

The equation that models the amount of money, A, Ana will have in 5 years is:

A = 1000(1 + 0.04)^5.

To calculate the amount of money in 5 years, we use the formula for compound interest:

A = P(1 + r/n)^(nt), where A is the final amount, P is the principal amount (initial deposit), r is the annual interest rate, n is the number of times interest is compounded per year, and t is the number of years.

In this case, P = $1000, r = 0.04 (4%), n = 1, and t = 5. Plugging these values into the formula, we get:

A = 1000(1 + 0.04)^5.

Calculating this equation will give us the amount of money Ana will have in 5 years.