Compute the compound interest.
-Tony invested $\$ 2500$ at $9 \%$ compounded annually. How much will be in the account in 5 years? Round to the nearest cent.
A) $\$ 1346.56$
B) $\$ 2501.68$
C) $\$ 3846.56$
D) $\$ 2595.17$

Question

Quizplus · Accepted Answer

The compound interest can be calculated using the formula $A = P(1 + \frac{r}{n})^{nt}$, where $A$ is the amount of money accumulated after n years, including interest, $P$ is the principal amount (\$2500), $r$ is the annual interest rate (9% or 0.09), $n$ is the number of times that interest is compounded per year (1 for annually), and $t$ is the time the money is invested for in years (5 years). Plugging in the values: $A = 2500(1 + \frac{0.09}{1})^{1*5} = 2500(1.09)^5 ≈ \$3846.56$.

Compute the Compound Interest $2500\$ 2500$2500 At 9%9 \%9% Compounded Annually $1346.56\$ 1346.56$1346.56

Compute the Compound Interest $\$ 2500$ At $9 \%$ Compounded Annually $\$ 1346.56$