To save for a car when he turns 18, Pascale deposited $500 each year into a savings account with a 7.5% interest rate
compounded annually.
1
Year
1
2
3
4
Beginning Balance
$500.00
$1,037.50
$1,615.31
$2,236.46
Interest Earned
$37.50
$77.81
$121.15
$167.73
Ending Balance
$537.50
$1,115.31
$1,736.46
$2,404.19
Using the formula A - P(1+r), wh
the value of the account at the end of the fifth year?
$3,071.92
$3,122.00
$3,851.77
$4,140.65