Solve the problem.
-Sumi Katoʹs savings account has a balance of $624. After 14 years what will the amount of interest Be at 1.5% compounded annually?
A) $144.62
B) $133.62
C) $873.60
D) $150.62

Question

Quizplus · Accepted Answer

The amount of interest can be found using the compound interest formula: A = P(1 + r/n)^(nt), where A is the amount of money accumulated after n years, including interest, P is the principal amount ($624), r is the annual interest rate (1.5% or 0.015), n is the number of times that interest is compounded per year (1 for annually), and t is the time the money is invested for (14 years). Plugging in the values: A = 624(1 + 0.015/1)^(1*14) = 624(1.015)^14 ≈ $768.62. The interest earned is the final amount minus the principal: $768.62 - $624 = $144.62.

Solve the Problem. -Sumi Katoʹs Savings Account Has a Balance of $624. After