Question

500 principal earning 3% compound monthly, after 10 years.

A. A bazillion dollars
B. $671,96
C. $512,64
D. $674,68​

Answer 1

D. $674.68

Explanation:

We will use the well known equation for compound interest

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

Where

• 
  `A` is the final total
• 
  `P` is the principal amount (starting total)
• 
  `r` is the interest rate as a decimal
• 
  `n` is the number of times the interest is compounded each year
• 
  `t` the number of years

Plugging in what we know from the question:

`A = 500(1+(0.03)/(12))^(12 * 10)\\A = 500(1.34935355)\\A = 674.68`

So the answer is D.

Hope this helps!