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Mario invested $6,000 in an account that pays 5% annual interest compounded annually. Using the formula A = P(1 + r)t, what is the approximate value of the account after 2.5 years?

A$6,075
B$6,118
C$6,456
D$6,778

Verified Answer :

meerkat18

Given:
Principal = 6,000
interest rate = 5%
term = 2.5 years

A = P (1+r)^t
A = 6,000 (1 + 0.05)².⁵
A = 6,000 (1.05)².⁵
A = 6,000 (1.1297)
A = 6,778.20 Choice D.

raphealnwobi

The approximate value of the account after 2.5 years is $6778.

Compound interest

The compound interest is given by:

A = P(1 + r)^t

where P is the initial amount, r is the interest rate, t is the period and A is the final amount.

Given that:

r = 5% = 0.05, P = $6000, t = 2.5 years, hence:

A = 6000(1 + 0.05) ^ 2.5 = $6778

The approximate value of the account after 2.5 years is $6778.

Find out more on Compound interest at: https://brainly.com/question/24924853

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