Answer:
About $1415.71
Step-by-step explanation:
We can use the formula for compound interest, given by:
[tex]\displaystyle A=P(1+\frac{r}{n})^{nt}[/tex]
Where P is the initial amount, r is the rate, n is the number of times compounded annually, and t is the time in years.
Our initial amount is the $1000 Bonnie deposited. So, P = 1000.
Our rate is the interest, which is 7.2% of 0.072. So, r = 0.072.
Since it is compounded annually, our n = 1. So, we have:
[tex]A=1000(1+0.072)^t[/tex]
We want the amount after 5 years. So, t = 5. Substitute and evaluate:
[tex]A=1000(1.072)^5\approx\$1415.71[/tex]
The investment will be worth about $1415.71 after 5 years.
