Question

Howard has $11300 he would like to invest into anaccount earning 3.5% interest compounded monthly.What equation shows how to find the amount of moneyin Howard's account after "t" years?

Answer 1

Answer; Option C

Step 1

State the formula for the amount of compound interest

`A=P(1+(r)/(n))^(t* n)`

Where;

`\begin{gathered} P=11300 \\ r=(3.5)/(100)=0.035 \\ t=t\text{ as given} \\ n=12 \end{gathered}`

Step 2

Substitute values and get the answer

`\begin{gathered} A=11300(1+(0.035)/(12))^(12* t) \\ A=11300(1+(0.035)/(12))^(12t) \end{gathered}`

Hence, the answer is option C as stated above

`A=11300(1+(0.035)/(12))^(12t)`