Answer:
C, $3,555.63
Step-by-step explanation:
to answer this, we have to use the compound interest formula which is:
A = P(1 + r/n)^nt
the meanings of each variable are:
A = result
P = principal amount
r = rate (in decimal form)
n = the number of compound periods (eg: annually, quarterly, etc)
t = time
in the word problem, we need to solve for A. we are given P, r, n, and t.
P = 2,400
r = 0.0395 also known as 3.95%
n = 4 keyword being quarterly which is equal to the value of 4
t = 10
we can plug these values into the formula:
A = 2400(1 + 0.0395/4)^(4)(10)
we can use a calculator to calculate this easier but ill break it down:
A = 2400(1 + 0.0395/4)^(4)(10)
A = 2400(1 + 0.0395/4)^40
A = 800(1.009875)^40
A = 2400(1.48151088)
A ≈ 3555.626
we can round 3555.626 to the nearest hundredth which is $3555.63
you would have earned $3555.63 in 10 years
our answer would be C