A home improvement firm has quoted a price of $14,700 to fix up Eric's backyard.Five years ago,Eric put $12,500 into a home improvement account that has earned an average of 4.75% per year.Does Eric have enough money in his account to pay for the backyard fix-up?
A)Yes; Eric now has exactly $14,700 in his home improvement account.
B)Yes; Eric has $15,764.50 in his home improvement account.
C)No; Eric now has $10,519.32 in his home improvement account.
D)There is not enough information to answer this question.

Question

Quizplus · Accepted Answer

Eric's initial investment of $12,500 at an average of 4.75% per year for 5 years would result in a balance of $15,339.70. Adding the interest earned would give a total of $15,764.50, which is greater than the $14,700 quote for the backyard fix-up. Therefore, Eric has enough money in his account to pay for the backyard fix-up.

A Home Improvement Firm Has Quoted a Price of $14,700