If $10,000 is deposited in a savings account that pays 5% annual interest and all of the interest is left in the account, what is the account balance after 7 years?
A) $10,500
B) $10,700
C) $14,025
D) $14,071

Question

Quizplus · Accepted Answer

The account balance is calculated using the formula for compound interest: $A = P(1 + r)^n$, where $P$ is the principal amount ($10,000), $r$ is the annual interest rate (0.05), and $n$ is the number of years (7). Plugging in the values, $A = 10000(1 + 0.05)^7 = 10000(1.4071) = 14071$.

If $10,000 Is Deposited in a Savings Account That Pays