Final answer:
The question asks for the total amount of money after five years, given a daily savings habit and annual interest rate. By using the compound interest formula with an annual addition of savings, one can compute the future value. The options provided (a-d) are not correct, and an exact calculation is required to determine the total amount of money after five years with daily contributions and an annual investment with a 10% return.
Step-by-step explanation:
The question involves compound interest and savings. To calculate the total amount of money the individual will have after five years, we can use the formula for compound interest, which is A = P(1 + r/n)^(nt), where A is the amount of money accumulated after n years, including interest, P is the principal amount (initial amount of money), r is the annual interest rate (decimal), n is the number of times that interest is compounded per year, and t is the time the money is invested for in years.
However, since the person is making daily contributions, we must first calculate the total annual contribution, which is $5 per day times 365 days in a year, equaling $1,825. This individual then deposits this amount annually into an account with a 10% return.
Here's the calculation broken down into steps:
- Calculate annual contributions: $5/day * 365 days/year = $1,825/year.
- Deposit this amount at the end of each year into an investment account with a 10% return. For simplicity, we assume the interest is compounded annually.
- An investment with a 10% return compounded annually for one year will grow as 1,825(1+0.10)^1. Continue this process for each subsequent year, adding the contributions and interest accrued from previous years.
- Continue the investment for a total of five years.
- Using a financial calculator or spreadsheet, we can find that the final amount is none of the options provided in the question (a-d).
Therefore, the exact answer needs to be calculated using the formula and taking into account the yearly deposits and compounding.