CHECK MY WORK PLEASE (ALGEBRA)

Samantha puts an initial $500 into a savings account. The account has a 4% annual compound interest rate. What is the function that best represents Samantha's account and how much does she have in savings after 5 years? Round your answer to the nearest dollar.
Use the formula, f(x) = P(1 + r)^x
Answers:
f(x) = 500(0.04)^x, $512
f(x) = 500(1.4)^x, $2,689
f(x) = 500(1.04)^x, $527 (My answer)
f(x) = 500(1.04)^x, $608

Question

CHECK MY WORK PLEASE (ALGEBRA)

Samantha puts an initial $500 into a savings account. The account has a 4% annual compound interest rate. What is the function that best represents Samantha's account and how much does she have in savings after 5 years? Round your answer to the nearest dollar.
Use the formula, f(x) = P(1 + r)^x 
Answers:
f(x) = 500(0.04)^x, $512
f(x) = 500(1.4)^x, $2,689
f(x) = 500(1.04)^x, $527 (My answer)
f(x) = 500(1.04)^x, $608

wanell · Answer

In the equation, P would be the principle, or the amount in this case, multiplied by the annual rate raised by the number of years. 4% in decimal form would be .04, adding 1 to it includes the total principle plus the 4%, if you just multiplied by .04 you would be taking 4% of the $500. The answer is C.