Which of the following formulas would you choose to calculate the future balance on an account that earns compound interest?

FV=PV(1 + i)nFV=PV(1 + i)^n (formula)

On Kevins first birthday, his parents deposited $2,500 into a savings account that earns a fixed rate of 7.50% and compounds interest annually. How much money will Kevins account have accumulated by his 19th birthday? (Hint: Round your answer to the nearest dollar.)

(a) $9,879

(b) $4,793

(c) $9,190

(d) $25,000

What-If Scenario 1

What would have been the balance in Kevins account if his parents had waited until his 10th birthday to make their initial deposit into the same account?

(a) $4,793

(b) $9,190

(c) $25,000

(d) $9,879

What-If Scenario 2

If Kevins parents wanted to accumulate an account balance of $5,000 by his 19th birthday, then how much should they have placed on deposit on his first birthday?

(a) $1,265

(b) $1,360

(c) $2,608

(d) $500