Bruce Derr invested $25,000 in an account which pays interest at a rate of 7% that is compounded monthly.At the end of 4 years how much will Bruce have?

Question

Quizplus · Accepted Answer

We can use the formula for compound interest:

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

where A is the final amount, P is the initial principal, r is the annual interest rate (as a decimal), n is the number of times the interest is compounded per year, and t is the time in years.

In this case, we have:

P = $25,000
r = 0.07 (7%)
n = 12 (monthly compounding)
t = 4

So, plugging in these values, we get:

A = $25,000(1 + 0.07/12)^(12*4)
A = $33,051.35

Therefore, Bruce will have $33,051.35 at the end of 4 years. The best choice is B.

Bruce Derr Invested $25,000 in an Account Which Pays Interest