how much will $1,000 amount to after three years if it is invested at 5% interest compounded annually?

Question

anonymous · Answer

A. $1488.20
B. $1463.27
C. $1352.40
D. $1157.63

anonymous · Answer

to increase a number by $5\%$ multiply it by $1.05$ 
to do it three times in a row, multiply it by $(1.05)^3$

anonymous · Answer

compute with a calculator 
$$1000(1.05)^3$$

anonymous · Answer

The equation for that would be B(t)= P(1+r/k)^kt. Meaning balance at time is equal to the initial investment (P) multiplied by 1+ rate divided by amount compounded, to the power of the amount compounded multiplied by time. B(t)=1000(1+0.05/1)^3. It should be $1157.63

anonymous · Answer

=1000*(1+5%)^3=1157.63
Thus, D should be the right choice.