An employee put $5,000.00 in a retirement account that offers 9% interest compounded annually. The employee makes no additional deposits or withdrawals. Which amount is closest to the interest the employee will have earned at the end of 5 years?

A) $229.09

B) $450.00

C) $2,250.00

D) $2,693.12

Question

Mathematics

Bradley

1 November, 13:06

An employee put $5,000.00 in a retirement account that offers 9% interest compounded annually. The employee makes no additional deposits or withdrawals. Which amount is closest to the interest the employee will have earned at the end of 5 years?

A) $229.09

B) $450.00

C) $2,250.00

D) $2,693.12

+2

Answers (1)

Know the Answer?

Comet · Answer 1

D) $2693.12

Step-by-step explanation:

The account balance is multiplied by 1.09 each year, so at the end of 5 years, it has been multiplied by 1.53862395 ...

After subtracting the initial deposit amount, the remainder is the interest earned:

... $5000 * (1.53862395 - 1) = $5000*0.53862395 ≈ $2693.12

An employee put $5,000.00 in a retirement account that offers 9% interest compounded annually. The employee makes no additional deposits or withdrawals. Which amount is closest to the interest the employee will have earned at the end of 5 years?A) $229.09B) $450.00C) $2,250.00D) $2,693.12

An employee put $5,000.00 in a retirement account that offers 9% interest compounded annually. The employee makes no additional deposits or withdrawals. Which amount is closest to the interest the employee will have earned at the end of 5 years?

A) $229.09

B) $450.00

C) $2,250.00

D) $2,693.12