Question

Amy makes an initial investment of $5000. The investment loses 13.5% each year. What will the amount of Amy's investment be in 5 years? A. $9,417.80 B.$2,952.45 C. $2,492.10 D. $2,421.31

Answer 1

the principal is P = 5000$

rate r = 13.5 %

time t = 5 years

the Amount after 5 years will be

$A=P(1-\frac{r}{100})^t$$A=5000(1-\frac{13.5}{100})^5$$A=5000\times(\frac{86.5}{100})^5$$A=5000\times0.4842$

A = 2421.31 $

thus the answer is option D