Solve the problem.
-The amount of money in an account is given by where P is the principal invested, r isthe interest rate (as a decimal), and t is the time of the investment. Find the amount at the end of 2 years if $600 is invested at 5%. Round to the nearest cent.
A)$900.00
B)$630.00
C)$1,350.00
D)$661.50

Question

Solve the problem.
-The amount of money in an account is given by  where P is the principal invested, r isthe interest rate (as a decimal), and t is the time of the investment. Find the amount at the end of 2 years if $600 is invested at 5%. Round to the nearest cent.
A)$900.00 
B)$630.00 
C)$1,350.00 
D)$661.50

Quizplus · Accepted Answer

We plug in the given values into the formula:
Amount = $600(1 + 0.05)^2 = $661.50
Rounding to the nearest cent gives us $\boxed{	extbf{(D)}\ \$661.50}$. We have P = $600, r = 0.05 (as 5% is the interest rate), and t = 2 years. Plugging these values into the given formula, we get:

Amount = P(1 + r)^t = 600(1 + 0.05)^2 ≈ $661.50

Rounding to the nearest cent, we get the final amount as $661.50. Therefore, the best choice is (D).

Solve the Problem. -The Amount of Money in an Account Is Given by Is