93.0k views
2 votes
If $4,200 is deposited in an account that pays 3.5% interest compounded annually, how much is in the account at the end of 7 years? A $1,143.57 B $5.343.57 C$1,029.25 D $5,040.57

1 Answer

2 votes

We would apply the formula for determining compound interest which is expressed as

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

Where

A = total amount in the account at the end of t years

r represents the interest rate

n represents the periodic interval at which it was compounded

P represents the initial amount deposited

From the information given,

P = 4200

r = 3.5/100 = 0.035

n = 1 because it was compounded once in a year

t = 7

By substituting these values into the equation,

A = 4200(1 + 0.035/1)^1 * 7

A = 4200(1.035)^7

A = 5343.57

The answer is $5343.57

User Iver
by
3.4k points