Question

Alexander’s parents are saving for his college fund. They put $8,000 into an interest-bearing account with an annual compound interest rate of 4.5%.

Alexander’s parents want to determine what the balance of his college fund account will be after 12 years.

Which formula would be used for this situation?
A = (8,000 + 0.045)12
A = 8,000(1 + 0.045)12
A = 8,000(1 + 0.12)4.5
A = 8,000 · 0.045 · 12

Answer 1

a=8,000(1+0.12)4.5

Explanation:

Answer 2

Explanation:

A = 8000(1+0.045)^2

(note: the last number in the given answer choices should be in superscript, or preceded by ^ to indicate exponent.)