Assume that $800 is deposited in an account in which interest is compounded 8 times a year, at an annual rate of 6%.Find the accumulated amount after 2 years.Round your answer to the nearest cent.
A)$901.59
B)$1,201.59
C)$801.59
D)$851.59
E)$1,001.59

Question

Quizplus · Accepted Answer

The formula for compound interest is $A = P(1 + \frac{r}{n})^{nt}$, where $A$ is the amount of money accumulated after n years, including interest, $P$ is the principal amount (the initial amount of money), $r$ is the annual interest rate (decimal), $n$ is the number of times that interest is compounded per year, and $t$ is the time the money is invested for in years. Plugging in the given values: $A = 800(1 + \frac{0.06}{8})^{8*2}$, calculating this gives $A ≈ $901.59$.

Assume That $800 Is Deposited in an Account in Which