Question

Sari opened a savings account with $150.00. The account earns interest at a rate of 6% compounded annually.

The table below shows her account balance at the end of each of the first three years.
If Sari makes no additional deposits or withdrawals, which of the following will be closest to her account balance at the end of year 6?
$184.65
$189.37
$200.73
$212.77

Answer 1

Explanation:

A = P(1 + r)^t

= $150.00 * (1 + 0.06)^6

= $212.77.

Hence Sari will have $212.77 at the end of year 6.