If you deposit $10,000 in a savings account at an annual interest rate of 6%,how much will you have in the account at the end of three years?
A) $8,396
B) $10,600
C) $11,800
D) $11,910

Question

Quizplus · Accepted Answer

The formula for calculating compound interest is:
A = P(1+r/n)^(nt)
where:
A = the future value of the investment
P = the principal investment amount (in this case, $10,000)
r = the annual interest rate (in this case, 6%)
n = the number of times the interest is compounded per year (assuming yearly, so n=1)
t = the number of years the money is invested (in this case, 3)

Plugging in the values: 
A = 10,000(1+0.06/1)^(1*3) = $11,910.

So, the best choice is D, which is the closest approximation to $11,910.

If You Deposit $10,000 in a Savings Account at an Annual