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17 June, 14:40

Mario invested $6,000 in an account that pays 5% annual interest compounded annually. Using the formula A = P (1 + r) t, what is the approximate value of the account after 2.5 years?

a. $6,075

b. $6,118

c. $6,456

d. $6,778

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  1. 17 June, 17:53
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    Answer

    $6,778

    Explanation

    The compound interest formula is A=p (〖1+r%) 〗^t.

    Where A = The total amount accumulated

    P = Amount invested

    r = interest rate

    t = the period of investment

    So,

    A=6000 (〖1+5%) 〗^2.5

    A=6000*〖1.05〗^2.5

    A=6,778.357932

    To the nearest whole number the answer is $6,778
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