The value of $100 left in a savings account earning 5% a year, will be worth what amount after ten years?
A) $150.00
B) $160.50
C) $159.84
D) $162.89

Question

Quizplus · Accepted Answer

The value of the money after ten years can be calculated using the formula for compound interest: $A = P(1 + r)^n$, 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), and $n$ is the number of years the money is invested or borrowed for. Plugging in the values: $A = 100(1 + 0.05)^{10} = 100(1.05)^{10} = 162.89$.

The Value of $100 Left in a Savings Account Earning