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

Question

Quizplus · Accepted Answer

The amount in the savings account can be calculated using the formula for compound interest: A = P(1 + r)^n, where A is the amount of money accumulated after n years, including interest, P is the principal amount ($100), r is the annual interest rate (5%, or 0.05), and n is the time the money is deposited for (7 years). Plugging in the values: A = 100(1 + 0.05)^7 = $140.71.

How Much Would Be in Your Savings Account in 7