Since this is a problem in exponential growth/decay, y = ab^x is the formula that will be used to solve this problem.
The initial value, "a", is the value you start out with and in this case, it is $2000.
The growth/decay factor is what "b" represents, and it is 4%. We need to change the percentage into a decimal, so we will take the percent symbol, change it into a decimal, and move it two places to the left. This is make it 0.04. The problem also mentions interest, implying an exponential growth. Therefore, you will add 0.04 by 1: 1+0.04 = 1.04.
The "x" represents an amount of time. It is 5 years. The equation should be written like this:
y = 2000(1.04)^5 y = 2433.30. When rounded to the nearest dollar, it is $2433.
x 7 pounds