Final answer:
To calculate the balance after 6 years for a $1500 deposit with 5% interest compounded yearly, use the compound interest formula, resulting in option 1: $1500 * (1 + 0.05)^6 as the correct equation.
Step-by-step explanation:
If you deposit $1500 in an account that pays 5% interest compounded yearly, to find the balance after 6 years, you would use the compound interest formula:
A = P(1 + r/n)^(nt)
Here:
- 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).
- n is the number of times that interest is compounded per year.
- t is the time in years.
In this scenario:
- P = $1500
- r = 5% or 0.05 (as a decimal)
- n = 1 (since it's compounded yearly)
- t = 6 years
Plugging these values into the formula gives you:
$1500 * (1 + 0.05/1)^(1*6)
which simplifies to:
$1500 * (1 + 0.05)^6
Therefore, the correct equation to represent the scenario would be option 1: $1500 * (1 + 0.05)6.