Question

Audrey deposited $1,750 into an account with 6.5% annual compound interest. What is the closest amount to the total balance Audrey would have at the end of 3 years? Options include:

F) $363.91
G) $2,113.91
H) $341.25
J) $2,091.25.

Answer 1

Using the compound interest formula A = P(1 + r/n)^(nt) where P=$1,750, r=6.5%, n=1, and t=3, the amount Audrey would have after 3 years is approximately $2,113.91.

Step-by-step explanation:

Audrey deposited $1,750 into an account with 6.5% annual compound interest. To calculate the closest amount to the total balance Audrey would have at the end of 3 years, we use the compound interest formula:

A = P(1 + r/n)nt

Where:

• A is the amount of money accumulated after n years, including interest.
• P is the principal amount (the initial amount Audrey deposited).
• r is the annual interest rate (decimal).
• n is the number of times that interest is compounded per year.
• t is the time the money is invested for in years.

Since the compounding frequency isn't specified, we'll assume it's compounded once a year (n = 1).

Therefore, A = 1750(1 + 0.065/1)1*3 = 1750(1.065)3

Calculating this yields:

A ≈ 1750 * 1.20829025 ≈ $2113.51

The closest amount to the total balance Audrey would have at the end of 3 years is therefore $2,113.91.