You have just remembered that four years ago you placed $1,000 in a bank account.If the bank was paying an annual rate of return of 8% during that time,how much should you have in your forgotten account?
A)$1,253.03
B)$1,360.49
C)$1,321.92
D)$1,301.92

Question

Quizplus · Accepted Answer

The amount in the account can be calculated using the formula for compound interest: A = P(1 + r/n)^(nt), where A is the amount of money accumulated after n years, including interest, P is the principal amount (the initial amount of money), r is the annual interest rate (decimal), n is the number of times that interest is compounded per year, and t is the time the money is invested for in years. In this case, since the interest is compounded annually (n=1), the formula simplifies to A = P(1 + r)^t. Plugging in the values: A = $1,000(1 + 0.08)^4 = $1,000(1.08)^4 = $1,360.49.

You Have Just Remembered That Four Years Ago You Placed