Ellen now has $125.How much would she have after 8 years if she leaves it invested at 8.5% with annual compounding?
A) $205.83
B) $216.67
C) $228.07
D) $240.08
E) $252.08

Question

Quizplus · Accepted Answer

We can use the formula for compound interest to find the final amount:

A = P(1 + r/n)^(nt)

Where:
A = final amount
P = initial amount
r = annual interest rate (as a decimal)
n = number of times interest is compounded per year
t = time in years

Plugging in the given values, we get:

A = 125(1 + 0.085/1)^(1*8)
A = 125(1.085)^8
A = $240.08

Therefore, Ellen would have $240.08 after 8 years if she leaves her money invested. The answer is D.

Ellen Now Has $125