Use the table to solve the problem. Round to the nearest cent.
-Barry Newman's savings account has a balance of $358. After 21 years, what will the amount of interest be at 4% compounded annually?
A)$143.20
B)$457.80
C)$462.80
D)$448.80

Question

Use the table to solve the problem. Round to the nearest cent. 
-Barry Newman's savings account has a balance of $358. After 21 years, what will the amount of interest be at 4% compounded annually?
A)$143.20 
B)$457.80 
C)$462.80 
D)$448.80

Quizplus · Accepted Answer

The amount of interest can be calculated using the formula for compound interest: A = P(1 + r/n)^(nt) - P, where A is the amount of interest, P is the principal amount ($358), r is the annual interest rate (4% or 0.04), n is the number of times the interest is compounded per year (1, since it's compounded annually), and t is the time the money is invested for (21 years). Plugging in the values: A = 358(1 + 0.04/1)^(1*21) - 358 = 358(1.04)^21 - 358 ≈ $457.80.

Use the Table to Solve the Problem