Question

Pat invested x dollars in a fund that paid 8% annual interest, compounded annually. Which of the following represents the value, in dollars, of Pat's investment plus interest at the end of 5 years:A. 5(0.08x)B. 5(1.08x)C. {1+5(0.08)}xD. (1.08)^5 *(x)E. (1.08x)^5

Answer 1

Answer: D.
`(1.08)^5* x`

Explanation:

The formula to find the compound amount (investment plus interest ) at the end of t years :

`A= (1+r)^t* P` (1)

, where r= rate of interest ( in decimal)

P= Initial amount.

As per given , we have

P = x dollars

r = 8% = 0.08

t = 5

Put all the values in (1) , we get

`A= (1+0.08)^5* x`

`A= (1.08)^5* x`

Therefore , the the expression that represents the value, in dollars, of Pat's investment plus interest at the end of 5 years :

`(1.08)^5* x`

Hence, the correct answer is D.
`(1.08)^5* x`