Multiple choice

Emily wants to buy a car after 5 years and decides to deposit $15,000 in a savings account that compounds interest annually at a rate of 5.5%. Approximately, what amount will she get at the end of 5 years?

  1. $18,600
  2. $19,600
  3. $23,600
  4. $26,600
  5. $28,600
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Using the compound interest formula A = P(1 + r)^t, we calculate 15000 * (1.055)^5. 1.055^5 is approximately 1.30696, and 15000 * 1.30696 equals approximately 19604.4.

AI explanation

We use the compound interest formula Amount = 15000 x (1 + 5.5/100)^5. This gives 15000 x (1.055)^5, which evaluates to 15000 x 1.31394. The final amount is approximately 19709, making 19600 the closest provided option.

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