Question

You invest 300$ at 4% intrest compounded every year what will your balance be after 5 years?

Answer 1

Option D
`\$365.00`

Explanation:

we know that

The compound interest formula is equal to

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

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest in decimal

t is Number of Time Periods

n is the number of times interest is compounded per year

in this problem we have

`t=5\ years\\ P=\$300\\ r=0.04\\n=1`

substitute in the formula above

`A=300(1+(0.04)/(1))^(1*5)`

`A=300(1.04)^(5)`

`A=\$365.00`