Question

Jaidee invests $4,266 in a savings account with a fixed annual interest rate of 6% compounded 12 times per year. What will the account balance be after 6 years?

A) $5,200
B) $6,000
C) $6,334.64
D) $7,000

Answer 1

To calculate the account balance after 6 years with a fixed annual interest rate of 6% compounded 12 times per year, we can use the formula for compound interest. Substituting the given values into the formula, the account balance after 6 years will be approximately $6,334.64.

Step-by-step explanation:

To calculate the account balance after 6 years with a fixed annual interest rate of 6% compounded 12 times per year, we can use the formula for compound interest:

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

Where:

• A is the final account balance
• P is the initial investment
• r is the annual interest rate (as a decimal)
• n is the number of times interest is compounded per year
• t is the number of years

Substituting the given values into the formula:

A = 4266(1 + 0.06/12)^(12*6)

Calculating this, the account balance after 6 years will be approximately $6,334.64. Therefore, the correct answer is option C) $6,334.64.