If you left $2,500 on deposit with a bank promising to pay you a 5% compound annual rate of interest,then after 50 years your deposit would total

Question

Quizplus · Accepted Answer

Using the formula A = P(1 + r/n)^(nt), where A is the amount, P is the principal, r is the annual interest rate, n is the number of times per year the interest is compounded, and t is the number of years, we have:

A = 2500(1 + 0.05/1)^(1*50) 
A = 2500(1.05)^50 
A ≈ $28,668

Therefore, the correct choice is D.

If You Left $2,500 on Deposit with a Bank Promising