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. $3,636.69
C. $2,665.61
D. $4,792.50
What is
2550(1.03)^1.5 ?
To find the balance in the account after 1.5 years, we can use the formula for compound interest:
A = P(1 + r/n)^(nt),
where:
A = the final amount (balance),
P = the principal amount (initial investment),
r = the annual interest rate (as a decimal),
n = the number of times interest is compounded per year, and
t = the time in years.
In this case:
P = $2,550
r = 3% or 0.03 (expressed as a decimal)
n = 1 (compounded annually)
t = 1.5 years
Plugging in the values, we have:
A = $2,550(1 + 0.03/1)^(1*1.5)
A = $2,550(1 + 0.03)^(1.5)
A = $2,550(1.03)^(1.5)
A = $2,550(1.03045)
A ≈ $2,625.81
Therefore, the balance in the account after 1.5 years is approximately $2,625.81.
Since none of the given answer choices match exactly, it seems like there might be a rounding error in one or more of the choices. However, option C - $2,665.61 - is the closest value to the calculated balance.