You have been saving toward the purchase of a new mountain bike.Five years ago,you placed $600 in a bank account,and you have since earned an annual rate of return of 12 percent.How much do you now have in your account?
A)$1,057.41
B)$1,293.71
C)$978.70
D)$1,138.70

Question

Quizplus · Accepted Answer

The correct answer is A because the amount in the account after 5 years is $1,057.41. This can be calculated using the formula A = P(1 + r)^nt, where A is the amount in the account, P is the principal (the initial amount deposited), r is the annual rate of return, n is the number of times per year that the interest is compounded, and t is the number of years. In this case, P = $600, r = 12%, n = 1 (since the interest is compounded annually), and t = 5. Plugging these values into the formula, we get A = 600(1 + 0.12)^1*5 = $1,057.41.

You Have Been Saving Toward the Purchase of a New