A home improvement firm has quoted a price of? $9,800 to fix up? eric's backyard. five years? ago, eric put? $7,500 into a home improvement account that has earned an average of? 5.25% per year. does eric have enough money in his account to pay for the backyard fixminus? up?

Question

Autumn Lowe

Business

5 November, 22:30

A home improvement firm has quoted a price of? $9,800 to fix up? eric's backyard. five years? ago, eric put? $7,500 into a home improvement account that has earned an average of? 5.25% per year. does eric have enough money in his account to pay for the backyard fixminus? up?

+4

Answers (1)

Know the Answer?

Terry Quinn · Answer 1

The amount of money that Eric will have after 5 years given the initial amount and the interest per year (which we will assume to be compounded)

F = P x (1 + r) ^n

Substituting,

F = ($7,500) (1 + 0.0525) ^5

F = $9,686

Therefore, Eric will be short of about $113.39.