Wendy invests $500 into a savings account with interest that compounds annually at a rate of 2.5%. Write a model that shows the total amount of money in her account as a function of time. How much money should Wendy expect to have in her savings account after 6 years, assuming she does not deposit or withdraw any other money before that time.
Compound Interest: A=P(1+r/n)^nt
(1 point)
Responses
A=(500⋅1.025)t
; $762.51
cap A is equal to open paren 500 times 1 point 0 2 5 close paren to the t th power; $762.51
A=500(1.25)t
; $1907.35
cap A is equal to 500 times 1 point 2 5 to the t th power; $1907.35
A=500(1.0256)t
; $1242.83
cap A is equal to 500 times open paren 1 point 0 2 5 over 6 close paren to the t th power; $1242.83
A=500(1.025)t
; $579.85
None of the provided options accurately represent the compound interest equation for Wendy's savings account. The correct model is:
A = 500(1 + 0.025)^t
where A represents the total amount of money in Wendy's account after t years.
Using this equation, we can calculate the amount of money Wendy should expect to have in her savings account after 6 years:
A = 500(1 + 0.025)^6
A ≈ 551.06
Therefore, Wendy should expect to have approximately $551.06 in her savings account after 6 years.