Answer:
The correct answer is B. US$371.32
Explanation:
1. Let's review the data given to us for solving the question:
Loan that Jesse's Mother did to Jesse = US$ 350
Duration of the loan = 2 years
Annual interest rate = 3% compounded annually
2. Let's find the future value of this loan after 2 years, using the following formula:
FV = PV * (1 + r) ⁿ
PV = Loan that Jesse's Mother did to Jesse = US$ 350
number of periods (n) = 2
rate (r) = 3% = 0.03
Replacing with the real values, we have:
FV = 350 * (1.03) ²
FV = 350 * 1.0609
FV = 371.32
Jesse will pay his mom back altogether US$ 371.32.