Question

A $6,300.00 principal earns 6% interest, compounded annually. After 3 years, what is the balance in the account?

A.1,360,800
B. 7,503
C.7,434
D.25, 804

Answer 1

Answer: B. $7,503

Explanation:

Given: Principal amount P = $6,300

The rate of interest r=6%=0.06

The time period t=3 years

The compound amount after t years with principal amount P at rate of interest r is given by :-

`A=P(1+r)^t`

Now, for the given situation, the compound amount after 3 years is given by :-

`A=6300(1+0.06)^3\\\Rightarrow\ A=6300(1.06)^3\\\Rightarrow\ A=7503.4008\approx7503`

Hence, the balance in the account after 3 years = $7503

Answer 2

balance in the account=6300(1.06)^3
=7,503
option b is correct
hope this helps