Ann invested $9000 in an account that earns 4.7% interest, compounded annually. The formula for compound interest is A(t) = P(1 + i)t. How much did Ann have in the account after 5 years? A. $11,323.38 B. $11,319.63 C. $11,115.00 D. $13,230.00
A more common and descriptive formula is:
FV = PV x [1 + R]^N, where FV=Future Value, PV=Present Value, R=Interest rate per period, N=Number of periods.
FV = 9,000 x [1 + 0.047]^5
FV = 9,000 x 1.047^5
FV = 9,000 x 1.258152857750007
FV = $11,323.38
