How much would be in your savings account in 7 years after depositing $100 today if the bank pays 5% interest per year?
A) $135.00
B) $140.71
C) $735.00
D) $814.20

Question

Quizplus · Accepted Answer

To calculate the balance after 7 years, we can use the formula for compound interest:

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

Where:
A = the final amount
P = the initial principal (which is $100 in this case)
r = the annual interest rate (which is 5%)
n = the number of times the interest is compounded per year (assuming it is compounded annually)
t = the time period in years (which is 7)

Substituting these values into the formula, we get:

A = 100(1 + 0.05/1)^(1*7)
A = 100(1.05)^7
A = $140.71

Therefore, the best choice is B.

How Much Would Be in Your Savings Account in 7