If you place $50 in a savings account with an interest rate of 7% compounded weekly, what will the investment be worth at the end of five years (round to the nearest dollar)?
A) $72
B) $70
C) $71
D) $57

Question

Quizplus · Accepted Answer

The formula to calculate compound interest is:

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

Where:
- A = the final amount
- P = the principal investment
- r = the annual interest rate (as a decimal)
- n = the number of times the interest is compounded per year
- t = the time (in years)

In this case, we have:
- P = $50
- r = 0.07 (7% as a decimal)
- n = 52 (weekly compounding)
- t = 5

So, plugging in these values:

A = 50(1 + 0.07/52)^(52*5) = $71.11

Rounding to the nearest dollar, the answer is $71. Therefore, the best choice is C ($71).

If You Place $50 in a Savings Account with an Interest