Mario invested 6 dollars comma 000 in an account that pays 5 percent annual interest compounded annually. Using the formula cap A is equal to cap p times open paren 1 plus r close paren to the t th power , what is the approximate value of the account after 2 point 5 years?
Answer
A
6 dollars comma 118
B
6 dollars comma 075
C
6 dollars comma 456
D
6 dollars comma 778
Explanation
Use A = P(1 + r)^t with P = 6,000, r = 0.05, and t = 2.5: A = 6,000(1.05)^2.5 ≈ 6,778. The approximate account value is $6,778, choice A.
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