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QuizMultiple Choice

Compound Interest

Question 1 • Academy- Financial Algebra A 27

A principal of $4,570 is placed in an account that earns 4.5% interest. If the interest is compounded annually, how much money will be in the account at the end of 5 years?

Answer
A
$4654.15
B
$4775.65
C
$5638.75
D
$5695.05

Explanation

Use the compound interest formula: final amount = principal × (1 + annual rate)^years. Substituting the values gives $4,570 × (1.045)^5 ≈ $5,695.05. The account will contain $5,695.05, which is choice D.

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