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

Answer

$6,778

Explanation

The compound interest formula is A=p (〖1+r%) 〗^t.

Where A = The total amount accumulated

P = Amount invested

r = interest rate

t = the period of investment

So,

A=6000 (〖1+5%) 〗^2.5

A=6000*〖1.05〗^2.5

A=6,778.357932

To the nearest whole number the answer is $6,778