Angela invests $2,550 at 3% interest compounded annually. What will be the balance in the account after 1.5 years?
A. $2,626.50
B. $3,635.69
C. $2,665.61
D. $4,792.50
To solve this problem, we can use the formula:
A = P(1 + r/n)^(nt)
where:
A = the final amount
P = the principal (initial) amount
r = the interest rate (as a decimal)
n = the number of times the interest is compounded per year
t = the time period (in years)
In this problem, we have:
P = $2,550
r = 0.03 (since the interest rate is 3%)
n = 1 (since the interest is compounded annually)
t = 1.5 years
Plugging these values into the formula, we get:
A = $2,550(1 + 0.03/1)^(1*1.5)
A = $2,665.61
Therefore, the answer is (C) $2,665.61.