Question

Avery deposited 1250 in a new savings account. Which amount is closest to the balance of the account at the end of three years

Answer 1

Answer: $1,467.80

Explanation:

The formula for the future value given annual compounding is:

= Amount * ( 1 + rate) ^ number of years

The amount after 3 years at 5.5% is therefore:

= 1,250 * ( 1 + 5.5%)³

= 1,250 * 1.174241375

= $1,467.80