Assume that $1,300 is deposited in an account in which interest is compounded annually at a rate of 6%.Find the accumulated amount after 2 years.Round your answer to the nearest cent.
A)$1,960.71
B)$1,360.68
C)$1,460.68
D)$1,710.70
E)$1,561.08

Question

Quizplus · Accepted Answer

The formula for compound interest is A = P(1 + r/n)^(nt), where P is the principal amount ($1,300), r is the annual interest rate (0.06), n is the number of times interest is compounded per year (1 for annually), and t is the number of years (2). Plugging in these values gives A = 1300(1 + 0.06/1)^(1*2) = 1300(1.06)^2 = 1300 * 1.1236 = 1460.68.

Assume That $1,300 Is Deposited in an Account in Which