If $100 is placed in an account that earns a simple 4 percent,compounded quarterly,what will it be worth in 5 years?
A) $122.02
B) $105.10
C) $135.41
D) $120.90
E) $117.48

Question

Quizplus · Accepted Answer

Using the formula for compound interest, 
A=P(1+r/n)^(nt), where 
A= amount after t years, 
P= principal amount, 
r= annual interest rate as a decimal, 
n= number of times interest is compounded per year, 
t= time in years,

we can plug in the given values to find the amount after 5 years:

A = 100(1+0.04/4)^(4*5) = $122.02

Therefore, the best choice is A.

If $100 Is Placed in an Account That Earns a Simple