Question

Sumara Kato's savings account has a balance of $1663. After 19 years, how much interest

will she have earned if her rate is 5.5% compounded annually?
(1) $3159.70 (2) $2936.27 (3) $2942.27
(4) $2925.27

Answer 1

Answer: $2936.27

Explanation:

Present value = $1663

Rate = 5.5%

Time(n) = 19years

Future value= PV(1+r)^n

= 1663(1+5.5%)^19

= 1663(1.055)^19

=1663 × 2.766

=4599.86

Interest = Future value - Present value

= $4599 - $1663

= 2936