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Barry's savings account has a balance of $2874. After 9 years, what will the amount of interest be at 5% compounded annually? a. $1589.52 c. $1575.52 b. $1584.52 d. $1437.00

User Basicxman
by
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1 Answer

1 vote

Answer:

Option B.
\$1,584.52

Explanation:

we know that

The compound interest formula is equal to


A=P(1+(r)/(n))^(nt)

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest in decimal

t is Number of Time Periods

n is the number of times interest is compounded per year

in this problem we have


t=9\ years\\ P=\$2,874\\ r=0.05\\n=1

substitute in the formula above


A=\$2,874(1+(0.05)/(1))^(1*9)=\$4,458.52

Find the interest


I=A-P=\$4,458.52-\$2,874=\$1,584.52

User Jith
by
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