I am confused about his question. I 3000 times.04 times 10 and added that to 3000 to get 4200 but its not an option
QUESTION::suppose you deposit $3000 in a savings account that pays interest in a a rate of 4%. if no money is added or withdrawn from the account, how much will be in the account after ten years.
A.3122.18
B.4994.50
C.4440.73
D.86776.40
if simple yearly interest
intererst each year
= .04 * 3000 = 120
120 * 10 = 1200
so 4200 would be correct
BUT if compounded
3000(1.04)^10 = 3000*1.48 = 4440.73
Thanks
To solve this question, you will need to use the compound interest formula. The formula for compound interest is:
A = P(1 + r/n)^(nt)
Where:
A is the final amount in the account
P is the principal amount (initial deposit)
r is the annual interest rate (expressed as a decimal)
n is the number of times the interest is compounded per year
t is the number of years
In this case, the principal (P) is $3000, the interest rate (r) is 4% or 0.04, and the number of years (t) is 10. Since the question mentions that no money is added or withdrawn, we can assume that the interest is compounded annually (n = 1).
Plugging these values into the compound interest formula, we get:
A = 3000(1 + 0.04/1)^(1*10)
= 3000(1 + 0.04)^10
≈ 3000(1.04)^10
≈ 3000(1.48024459)
Evaluating this calculation, we find that the final amount in the account after ten years is approximately $4440.73.
Therefore, the correct answer is option C: $4440.73.