Question

George’s parents are saving for his college fund. They put $5,000 into an interest bearing account with a compound interest rate of 5.5%. George’s parents want to determine what the balance of his college fund account will be after 15 years. Using the formula. which is the correct substitution for the formula?

Answer 1

Hi there
The formula is
A=p (1+r)^t
A future value?
P present value 5000
R interest rate 0.055
T time 15 years
So
A=5,000×(1+0.055)^(15)
A=11,162.38

Hope it helps

Answer 2

Answer: $ 11162.38 (Approx)

Explanation:

Here the principal amount is, P = $ 5000

Annual rate is, r = 5.5%

Total time, t = 15 years

Thus, the amount of saving after getting 5.5% compound annual interest for 15 years is,

`A = P(1+(r)/(100) )^t`

`A = 5000(1+(5.5)/(100) )^(15)`

`A = 5000(1+0.055)^(15)`

`A = 5000(1.055)^(15)`

`A = 11162.3824612\approx 11162.38`

Thus, The balance of his college fund account will be after 15 years is $ 11162.38 (Approx)