If $5000 is invested at an interest rate of 4% each year, what is the value of the investment in 5 years? Write an exponential function and solve.

If this value was compounded in 5 years, then we are going to use the compound interest formula to solve it.

A = p (1+r%) ∧n

Where A⇒ Amount accumulated for the entire period.

p⇒ Money invested

r⇒ Interest rate per year

n ⇒ period the money was invested.

∴A = 5000 (1+4/100) ∧5

The exponential function is A=5000*1.04∧5

A=5000*1.04∧5

=5000*1.216652902

=6,083.264512

The amount after 5 years = $6,083.26