Question

If $1,000 is invested in an account that pays 4% interest compounded annually, an expression that represents the amount in the account at end of three years can be given by which of the following equations?

A. 1000+0.4^3
B. 1000(0.3)^3
C. 1000(1.04)^3 ...?

Answer 1

The answer is C.1000(1.04)^3

Answer 2

Since the equation is balance = principal (1 + rate of interest) ^ time, then the correct answer should be C. 1000 (1.04)^3.