Use the table to solve the problem. Round to the nearest cent.
-Andrea Gilford's savings account has a balance of $73. After 4 years, what will the amount of interest be at 8% compounded quarterly?

Question

Use the table to solve the problem. Round to the nearest cent. 
-Andrea Gilford's savings account has a balance of $73. After 4 years, what will the amount of interest be at 8% compounded quarterly?

Quizplus · Accepted Answer

Using the compound interest formula: A = P(1 + r/n)^(nt), where A is the final amount, P is the principal (starting balance), r is the annual interest rate, n is the number of times interest is compounded per year, and t is the time in years. Plugging in the given values, we get: A = 73(1 + 0.08/4)^(4*4) = $100.21. To find the interest earned, we subtract the principal from the final amount: $100.21 - $73 = $27.21. Rounded to the nearest cent, the answer is $27.21. Therefore, the best choice is A.

Use the Table to Solve the Problem