Question

5,000 dollars is placed in a savings account with an annual interest rate of 3%. if no money is added or removed from the account, which equation represents how much will be in the account after 6 years?
answer

• ( m = 5,000(1.03)^6 )
• ( m = 5,000(0.03)^6 )
• ( m = 5,000(1 - 0.03)^6 )
• ( m = 5,000(1 + 0.03)^6 ) (partially visible)

Explanation:

Step1: Identify compound interest formula

The formula for compound interest (annual compounding, no additional deposits/withdrawals) is $M = P(1 + r)^t$, where $P$ is principal, $r$ is annual interest rate, $t$ is time in years.

Step2: Plug in given values

$P = 5000$, $r = 0.03$, $t = 6$. Substitute into formula:
$M = 5000(1 + 0.03)^6 = 5000(1.03)^6$

Step3: Match to correct option

Compare the derived equation to the provided choices.

Answer:

$M = 5,000(1.03)^6$