Question

Suppose that $2000is invested at a rate of 4.4% compounded quarterly. Assuming that no withdrawals are made, find the total amount after 10 years. Do not round any intermediate computations, and round your answer to the nearest cent.

A. $3097.96
B. $2000.00
C. $4000.00
D. $5000.00

Answer 1

To find the total amount after 10 years, we can use the formula for compound interest. The correct answer is A. $3097.96.

Step-by-step explanation:

To find the total amount after 10 years, we can use the formula for compound interest: A = P(1 + r/n)^(nt), where A is the final amount, P is the principal amount (initial investment), r is the annual interest rate, n is the number of times interest is compounded per year, and t is the number of years.

Plugging in the given values, we have A = 2000(1 + 0.044/4)^(4*10). Evaluating this expression, the total amount after 10 years is $3097.96. Therefore, the correct option is A. $3097.96.