Multiple choice

Janette invested $ $2000$ at $5\%$ compounded annually for $5$ years. How much interest did she earn at the end of the $5$ year period?

  1. $ $552.56$
  2. $ $952.56$
  3. $ $352.56$
  4. $ $652.56$
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A Correct answer
Explanation

Compound interest = P * ((1 + r)^n - 1). Interest = 2000 * ((1.05)^5 - 1) = 2000 * (1.27628 - 1) = 2000 * 0.27628 = 552.56.

AI explanation

Using the compound interest formula A = P(1 + r/100)^n, the total amount is A = 2000(1 + 5/100)^5. Calculating this gives A = 2000(1.05)^5 = 2552.56. The interest earned is the total amount minus the principal, which is 2552.56 - 2000 = 552.56. The result is $552.56.

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