Question

Find the balance in the account: $1,600 principal earning %7, compounded annually,after 3 years

Answer 1

Answer:

Option C. $\ 1,960.07$  

Step-by-step explanation:

we know that    

The compound interest formula is equal to  

$A=P(1+\frac{r}{n})^{nt}$  

where  

A is the Final Investment Value  

P is the Principal amount of money to be invested  

r is the rate of interest  in decimal

t is Number of Time Periods  

n is the number of times interest is compounded per year

in this problem we have  

$t=3\ years\\ P=\ 1,600\\ r=7\%=7/100=0.07\\n=1$  

substitute in the formula above

$A=1,600(1+\frac{0.07}{1})^{1*3}$  

$A=1,600(1.07)^{3}$  

$A=\ 1,960.07$