How much would be in your savings account in 12 years if you deposited $1,500 today? Assume the bank pays 5% per year.
A) $2,387.12
B) $2,491.03
C) $2,693.78
D) $2,771.09

Question

Quizplus · Accepted Answer

Using the formula for compound interest, we can find the amount in the savings account after 12 years:

A = P(1 + r/n)^(nt)

Where:
A = amount after 12 years
P = initial deposit = $1,500
r = interest rate = 5% = 0.05
n = number of times interest is compounded per year = 1
t = number of years = 12

Substituting the values:

A = $1,500(1 + 0.05/1)^(1*12)
A = $1,500(1.05)^12
A = $2,693.78

Therefore, the best choice is C, with an amount of $2,693.78 in the savings account after 12 years.

How Much Would Be in Your Savings Account in 12