Felix deposited $500 into an account two years ago.The first year he earned 3 percent interest and the second year he earned 5 percent interest.How much money does Felix have in his account now?
A)$540.75
B)$540.80
C)$540.85
D)None of the above are correct to the nearest penny.

Question

Quizplus · Accepted Answer

The correct answer is A.Felix earned 3% interest the first year, which is $500 * 0.03 = $15. He then earned 5% interest the second year, which is ($500 + $15) * 0.05 = $27.75. So, he now has $500 + $15 + $27.75 = $542.75 in his account.

Felix Deposited $500 into an Account Two Years Ago