Barry's savings account has a balance of $2874. After 9 years, what will the amount of interest be at 5% compounded annually? a. $1589.52 c. $1575.52 b. $1584.52 d. $1437.00
Question
Answer:
Answer:Option B. [tex]\$1,584.52[/tex]Step-by-step explanation:we know that The compound interest formula is equal to [tex]A=P(1+\frac{r}{n})^{nt}[/tex] where A is the Final Investment Value P is the Principal amount of money to be invested r is the rate of interest in decimal
t is Number of Time Periods n is the number of times interest is compounded per year
in this problem we have [tex]t=9\ years\\ P=\$2,874\\ r=0.05\\n=1[/tex] substitute in the formula above [tex]A=\$2,874(1+\frac{0.05}{1})^{1*9}=\$4,458.52[/tex] Find the interest[tex]I=A-P=\$4,458.52-\$2,874=\$1,584.52[/tex]
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