A student deposited $700 in a savings account that pays 6% annual interest. At the end of 10 years,
How much money will be in the savings account?
A)$1,253.59
B)$1,120.00
C)$1,820.00
D)$1,953.59

Question

Quizplus · Accepted Answer

The amount of money in the savings account can be calculated using the formula for compound interest: A = P(1 + r/n)^(nt), where A is the amount of money accumulated after n years, including interest, P is the principal amount ($700), r is the annual interest rate (6%, or 0.06), n is the number of times that interest is compounded per year, and t is the time the money is invested for in years. Assuming the interest is compounded annually (n=1), the formula simplifies to A = 700(1 + 0.06)^10. Calculating this gives A = $1,253.59.

A Student Deposited $700 in a Savings Account That Pays