Question

If the APY of a savings account is 3.9%, and if the principal in the savings account is $3700 for an entire year, what will be the balance of the savings account after all the interest is paid for the year?

A. 3900.00
B. 3844.30
C. 3714.43
D. 3700.00

Answer 1

Option B.

Explanation:

It is given that

AYP = 3.9%=0.039

Principal amount = $3700

Time = 1 year.

We need to find the balance of the savings account after all the interest is paid for the year.

The formula for amount is

`A=P(1+r)^t`

where, A is amount, P is principal, r is rate of return and t is time in years.

Substitute the given values.

`A=3700(1+0.039)^1`

`A=3700(1.039)`

`A=3844.30`

Therefore, the correct option is B.

Answer 2

Option B.
`\$3,844.30`

Explanation:

we know that

The simple interest formula is equal to

`A=P(1+rt)`

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest

t is Number of Time Periods

in this problem we have

`t=1\ years\\ P=\$3,700\\r=0.039`

substitute in the formula above

`A=\$3,700(1+0.039*1)=\$3,844.30`