Suppose that a bank account paying 3% interest per year, compounded 3 times per year, contains $44,900 at the end of 15 years. What was the initial amount deposited in the bank account? Round your answer to the nearest cent.
A) $28,820.43
B) $28,944.55
C) $28,693.57
D) $28,819.60

Question

Quizplus · Accepted Answer

The formula for compound interest is A = P(1 + r/n)^(nt). Solving for P gives P = A / (1 + r/n)^(nt). Here, A = $44,900, r = 0.03, n = 3, t = 15. Plugging these values into the formula gives P ≈ $28,693.57.

Suppose That a Bank Account Paying 3% Interest Per Year