To calculate the amount of money in the account by 2016, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the amount of money accumulated after n years, including interest.
P = the principal amount (initial deposit).
r = the annual interest rate (in decimal).
n = the number of times that interest is compounded per year.
t = the time the money is invested for in years.
In this case:
P = $5500
r = 7.5% or 0.075
n = 1 (compounded annually)
t = 2016 - 2007 = 9 years
Plugging these values into the formula:
A = 5500(1 + 0.075/1)^(1*9)
A ≈ 5500(1.075)^9
A ≈ 5500 * 1.7189
A ≈ 9453.95
So, by 2016, there would be approximately $9453.95 in the account.
