a saving account accrues interest at a rate of 3.0% yearly. if someone opens an account with 2,500 how much moeny would the account have after 5 years?

A. 2,575.00
B. 2,813.77
C. 2,898.19
D. 2,985.13

Question

a saving account accrues interest at a rate of 3.0% yearly. if someone opens an account with 2,500 how much moeny would the account have after 5 years? 

A. 2,575.00
B. 2,813.77
C. 2,898.19
D. 2,985.13

shane_b · Answer

$$A=P(1+\frac{r}{n})^{nt}$$Where A = amount, P = principal amount, n = number of times compounded per year and t = number of years.  

For annual compounding, this can be simplified to:
$$A=P(1+r)^t$$So for your question:
$$A=$2500(1+0.03)^5=2898.19$$