Answer:
$608
Step-by-step explanation:
To find the amount that the investment will be worth in 5 years, you have to use the following formula:
FV= PV*(1+(r/n))^nt
FV= Final value
PV= Present value= $500
r= interest rate= 4% (0.04)
n= number of times that the interest is applied in a period= 1
t= number of time periods= 5
FV= 500*((1+(0.04/1))^(1*5)
FV= 500*(1.04)^5
FV= 500*1.216
FV= 608
The answer is that it will be worth $608 in 5 years.
