Solve the problem. When needed, use 365 days per year and 30 days per month.
-An initial investment of $1000 is appreciated for 7 years in an account that earns 11% interest, compounded annually. Find the amount of money in the account at the end of the period.
A) $2304.54
B) $1076.16
C) $2076.16
D) $1870.41

Question

Quizplus · Accepted Answer

The formula for compound interest is A = P(1 + r/n)^(nt). Here, P = $1000, r = 0.11, n = 1, and t = 7. Plugging in these values, A = 1000(1 + 0.11/1)^(1*7) = 1000(1.11)^7 ≈ $2076.16.

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