Question

$485 is deposited into a savings account that earns 3.25% compound interest for 6 years. How much is in the account at the end of 6 years?

A. 587.60
B. 579.58
C. 94.58
D. 102.60

Answer 1

A. 587.60

Explanation:

Use the formula:

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

where P=$485

`r=3.25\%=0.0325`

and

t=6 years.

We substitute the values into the formula to get:

`A=485(1+0.0325)^6`

This simplifies to:

`A=485(1.0325)^6`

`A=587.60`

The correct choice is A