an employee put $5,000.00 in a retirement account that offers 9% interest compounded annually. the employee…

an employee put $5,000.00 in a retirement account that offers 9% interest compounded annually. the employee makes no additional deposits or withdrawals. which amount is closest to the interest the employee will have earned at the end of 5 years? $a = p(1 + r)^t$ *hint: you are solving for interest ($i = a - p$)

an employee put $5,000.00 in a retirement account that offers 9% interest compounded annually. the employee makes no additional deposits or withdrawals. which amount is closest to the interest the employee will have earned at the end of 5 years? $a = p(1 + r)^t$ *hint: you are solving for interest ($i = a - p$)

Answer

Explanation:

Step1: Identify values

$P = 5000$, $r=0.09$, $t = 5$

Step2: Calculate the amount $A$

$A=P(1 + r)^t=5000\times(1 + 0.09)^5=5000\times1.09^5$ $1.09^5=1.09\times1.09\times1.09\times1.09\times1.09\approx1.538624$ $A = 5000\times1.538624=7693.12$

Step3: Calculate the interest $I$

$I=A - P=7693.12-5000 = 2693.12$

Answer:

$2693.12$