Question

Becky is going to invest some of the money that she has saved by waiting tables in the summer. Becky has saved $300 and is placing it in an account that will earn 6% compound interest. How much money will she have after 4 years?

a) $358.21
b) $318.98
c) $282.24
d) $327.36

Answer 1

Becky will have a total of $378.74 after 4 years

Step-by-step explanation:

To find the amount of money Becky will have after 4 years with compound interest, we can use the formula:

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

Where:

• A is the final amount of money
• P is the initial amount of money ($300)
• r is the annual interest rate (6% or 0.06)
• n is the number of times interest is compounded per year (assuming annually, so n = 1)
• t is the number of years (4)

Plugging in the values:

A = 300(1 + 0.06/1)^(1*4)

A = 300(1.06)^4

A = 300 * 1.26248

A = 378.74

Therefore, Becky will have a total of $378.74 after 4 years.