Question

A bank has opened a new branch and, as part of a promotion, the bank branch is offering $1,000 certificates of deposit at simple interest of 4% per year. The bank is selling certificates with terms of 1, 2, 3, or 4 years. Which of the following functions gives the total amount, AAA, in dollars, a customer will receive when a certificate with a term of kkk years is finally paid?a) A=1,000(1.04k)b) A=1,000(1+0.04k)c) A = 1,000(1.04)^kd) A = 1,000(1 + 0.04^k)

Answer 1

option A

Explanation:

given,

the bank branch is offering $1,000 certificates of deposit.

Rate of interest per year = 4 % = 0.04

The bank is selling certificates with terms of 1, 2, 3, or 4 years

total amount = A , in dollar

time of investment = k years

4 k% is added to the original deposit.

A = P + P r t

A = P (1 + r t)

A = P (1 + 0.04 k)

the correct answer is option A