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Ben deposited $20,000 in a retirement fund that earns 5% interest compounded annually.

What will be the balance in Ben's account after 7 years? Round to the nearest dollar.

 Dec 18, 2014

Best Answer 

 #2
avatar+961 
+15

Write an exponential equation for $20,000 invested in an account that earns 5% interest per year for 7 years.

The general formula for exponential growth is y=a(1+r)t.

In this situation, a = 20,000, = 0.05, and = 7.

y=20,000(1+0.05)7y=20,000(1.05)7y=28,142.01

Rounded to the nearest dollar, 28,142.01 is 28,142.

The account balance would be $28,142 after 7 years.

 Dec 18, 2014
 #1
avatar+99329 
+10

FV=20000*(1+0.05)^7

 

$${\mathtt{20\,000}}{\mathtt{\,\times\,}}{\left({\mathtt{1}}{\mathtt{\,\small\textbf+\,}}{\mathtt{0.05}}\right)}^{{\mathtt{7}}} = {\mathtt{28\,142.008\: \!453\: \!125}}$$

.
 Dec 18, 2014
 #2
avatar+961 
+15
Best Answer

Write an exponential equation for $20,000 invested in an account that earns 5% interest per year for 7 years.

The general formula for exponential growth is y=a(1+r)t.

In this situation, a = 20,000, = 0.05, and = 7.

y=20,000(1+0.05)7y=20,000(1.05)7y=28,142.01

Rounded to the nearest dollar, 28,142.01 is 28,142.

The account balance would be $28,142 after 7 years.

shaniab29544 Dec 18, 2014
 #3
avatar+99329 
+10

yes  you are right. :)

 Dec 18, 2014
 #4
avatar+961 
+10

oh really yay i thought i was right but i geuss not 

 Dec 18, 2014

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