Question

1.Eniya put $5000 in a retirement account that offers 9% interest compounded annually. Eniya makes no additional deposits or withdrawals. Which amount is closest to the balance Eniya will have earned at the end of 5 years? Use the formula A = P(1 + r)^t (^t is the exponent

Answer 1

To solve this question, we need to use the next formula:

$A=P\cdot(1+r)^t$

We have:

P = $5000

r = 9% = 0.09

t = 5 years

Then, we have

$A=5000\cdot(1+0.09)^5=5000\cdot(1.53862)=7693.11977\approx7693.12$

If Eniya put $5000