Final answer:
To find the future value of an investment with compound interest, use the formula A = P(1 + r/n)^(nt). Substituting the values for Faith's case, the investment grows to $4,020.29 after 6 years, so the correct answer is D) $4,020.29.
Step-by-step explanation:
To determine the future value of Faith's investment, we use the formula for compound interest:A = P(1 + r/n)^(nt), where:A is the amount of money accumulated after n years, including interest.P is the principal amount (the initial amount of money).r is the annual interest rate (in decimal form).n is the number of times that interest is compounded per year.t is the time the money is invested for, in years.In Faith's case, P=$3000, r=0.05 (5% expressed as a decimal), n=1 (since it is compounded annually), and t=6 years.
Using the formula, Faith's investment at the end of 6 years will be:A = 3000(1 + 0.05/1)^(1*6) = 3000(1.05)^6Calculating this gives us:A = 3000 * 1.3401 = $4,020.29Therefore, the correct answer is D) $4,020.29.To calculate the value of an investment that earns compound interest, we can use the formula A = P(1 + r/n)^(nt), where A is the future value, P is the principal amount, r is the interest rate, n is the number of times the interest is compounded per year, and t is the number of years.In this case, Faith deposited $3,000 with an interest rate of 5% compounded annually for 6 years. Plugging these values into the formula, the future value will be $4,014.68.Therefore, the correct answer is B) $4,014.68.