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The product of an initial investment, I, and the quantity of the sum of 1 and the annual interest rate, r, raised to the power of n, the number of years of the investment, is equal to M, the current amount of money in an investment account. If an initial investment of $1,423.00 is made to an account with an annual interest rate of 2%, what will be the value of M after 3 years? Round to the nearest cent. A. $1,510.10 B. $1,339.32 C. $1,480.49 D. $1,508.38

User Erlando
by
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1 Answer

3 votes

Answer:

A. $1,510.10

Explanation:

Fill in the given numbers and do the arithmetic.

M = I·(1+r)^n

M = $1423.00·(1 +.02)^3 = $1510.099

M ≈ $1510.10

User Richsoni
by
5.8k points
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