Question

You invest $2,000 in an account that is compounded annually at an interest rate of 5%. You never withdraw money from the account. Which equation below gives the amount of money you will have in the account after t years?

A(t) = 2,000e5t
A(t) = 2,000e0.05t
A(t) = 2,000(1.5)t
A(t) = 2,000(1.05)t

Answer 1

A(t) = 2000(1.05)^t

Explanation:

Answer 2

Formula for amount for compound interest:

Amount, A = P(1 + r/100)^n

Where r is rate, P is principal, and n is the number of years.

P = 2000, r = 5, n = t years.

A = 2000( 1 + 5/100)^t

A = 200(1+0.05)^t

A = 2000(1.05)^t

A(t) = 2000(1.05)^t

None in the option look like the answer we have.

Except you didn't type the last option correctly.