Barry Newman's savings account has a balance of $1541. After 17 years, what will the amount of interest be at 6% compounded annually?
A) $2608.56
B) $2599.56
C) $924.60
D) $2613.56

Question

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 ($1541), r is the annual interest rate (6% or 0.06), n is the number of times the interest is compounded per year (1 for annually), and t is the time the money is invested for (17 years). Plugging in the values: A = 1541(1 + 0.06/1)^(1*17) - 1541 = $2608.56.

Barry Newman's Savings Account Has a Balance of $1541