Question

Alexander’s parents are saving for his college fund. They put $8,000 into an interest-bearing account with an annual compound interest rate of 4.5%.

Alexander’s parents want to determine what the balance of his college fund account will be after 12 years.

Which formula would be used for this situation?
A = (8,000 + 0.045)12
A = 8,000(1 + 0.045)12
A = 8,000(1 + 0.12)4.5
A = 8,000 · 0.045 · 12




I no longer need help,,, the answer is B for anybody else who needs it

Answer 1

Answer: Second Option: A=8,000 (1+0.045)^12

Data:
Investment: I=$8,000
Annual compound interest rate: i=4.5%=4.5/100=0.045
Number of years: n=12
Future value: A=?

Solution:
A=I (1+i)^n

Replacing the known values:
A=$8,000 (1+0.045)^12

Answer 2

Answer: Option (B)
A = 8,000(1 + 0.045)^12

Step-by-step explanation:

The compound interest forumula is given in the attached picture.

Here, P = $8000
Rate = 4.5%
n = 1 (compounded annually)
t= 12 yrs.
When we put the values is the formula, we get,

Amount,A = 8000(1+ {4.5/100})^12
= 8000(1+ 0.045)^12