Question

You invest $300 at 4% interest, compounded every year. What will your balance be after 5 years? (Remember, the formula is A = P(1 + r)t.)
A. $364.65

B. $382.88

C. $365.00

D. $350.96

Answer 1

$\bf ~~~~~~ \textit{Compound Interest Earned Amount} \\\\ A=P\left(1+\frac{r}{n}\right)^{nt} \quad \begin{cases} A=\textit{accumulated amount}\dotfill\\ P=\textit{original amount deposited}\to &\ 300\\ r=rate\to 4\%\to \frac{4}{100}\to &0.04\\ n= \begin{array}{llll} \textit{times it compounds per year}\\ \textit{every year, once} \end{array}\to &1\\ t=years\to &5 \end{cases} \\\\\\ A=300\left(1+\frac{0.04}{1}\right)^{1\cdot 5}\implies A=300(1.04)^5\implies A\approx 364.996$