You purchase a five-year savings bond. The value of the increases by 5% each year. After five years, what is the total percentage increase from the bond's initial value? Give your answer as a percentage rounded to the nearest tenth of a percent.

Question

Quizplus · Accepted Answer

The bond's value increases by 5% each year, so after five years, the total increase is calculated by (1.05)^5 - 1 = 0.276, which is a 27.6% increase.

You Purchase a Five-Year Savings Bond