If you put $400 into a bank account today and it promises to pay 5% interest for 6 years,how much is in the account at the end of the six years?

Question

Quizplus · Accepted Answer

To calculate the final amount in the account, we can use the formula A = P(1+r/n)^(nt), where A is the final amount, P is the principal (initial amount), r is the annual interest rate (as a decimal), n is the number of times interest is compounded per year, and t is the number of years. In this case, we have P = 400, r = 0.05, n = 1 (interest compounded annually), and t = 6. Plugging these values into the formula, we get:

A = 400(1+0.05/1)^(1*6)
A = 400(1.05)^6
A = 400(1.340096)
A = 536.04

Therefore, the final amount in the account at the end of six years is $536.04, which corresponds to choice B.

If You Put $400 into a Bank Account Today and It