Question

Determine the balance of the bank account after 4 years when $1400 is deposited that earns 6 percent interest each year, compounded yearly. Round your answer to the nearest hundredth.

A) $1,912.42

B) $1,518.88

C) $1,674.62

D) $1,765.96

Answer 1

To determine the balance of the bank account after 4 years with a $1400 deposit earning 6 percent interest, we can use the formula for compound interest.

Step-by-step explanation:

To determine the balance of the bank account after 4 years with a $1400 deposit earning 6 percent interest, we can use the formula for compound interest:

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

Where:
A = the future value of the investment
P = the principal amount (the initial deposit)
r = the annual interest rate (in decimal form)
n = the number of times interest is compounded per year
t = the number of years

Plugging in the values from the question, we get:

A = 1400(1 + 0.06/1)^(1 * 4)

A = 1400(1.06)^4

Calculating this gives us a balance of approximately $1,912.42

Therefore, the correct answer is A) $1,912.42