Question

sketch a graph that shows a savings account that grows 5%, starting at 5000, every year for five years

Answer 1

The compounded annually interest formula is given by

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

In our case, the initial amount P=5000, the rate is 0.05 and the time t goes from 0 to 5 years. By substituting the values, we have

`\begin{gathered} A=5000(1+0.05)^t \\ A=5000(1.05)^t \\ \text{then, the graph Amount versus time will be:} \end{gathered}`