If you deposit $5,000 in an account that pays 5% interest compounded annually, how much money will you have in your account at the end of 15 years? Write an exponential function that represents this situation.
I got 1,500,000 but im not sure if i did it right and im stuck
nvm i got the answer
sorry wrong post
To calculate the amount of money in your account at the end of 15 years, we can use the formula for compound interest:
A = P(1 + r/n)^(n*t)
Where:
A = the final amount of money in the account
P = the initial deposit (principal), in this case $5,000
r = the annual interest rate, in this case 5% (or 0.05 as a decimal)
n = the number of times interest is compounded per year, which is annually in this case
t = the number of years
Substituting the given values into the formula, we get:
A = 5000(1 + 0.05/1)^(1*15)
Let's simplify this:
A = 5000(1 + 0.05)^15
A = 5000(1.05)^15
Using a calculator, we find that (1.05)^15 is approximately 2.078925044.
So, the final amount of money in the account is:
A = 5000 * 2.078925044
A ≈ $10,394.63
Therefore, the correct answer is approximately $10,394.63, not $1,500,000.