Question

Samantha puts an initial $500 into a savings account. The account has a 4% annual compound interest rate. What is the function that best represents Samantha's account and how much does she have in savings after 5 years?

Answer 1

$608.32

Explanation:

Step one:

given data

principal P= $500

rate r= 4%= 0.04

time t= 5years

Step two:

The function that best represents Samantha's account

A=P(1+r)^t

substituting and solving for A, which is the final amount

A=500(1+0.04)^5

A=500(1.04)^5

A=500*1.2166

A=608.32

Thus, she has in savings after 5 years $608.32