John deposited $3300 in a savings account at an annual interest rate of 2%. If John does not deposit or withdraw any money, what is the amount of interest John will
earn in 25 years?
A $1200
B $1150
C $1650
D $4950
The formula for compound interest is:
A = P(1 + r/n)^(nt)
where A is the amount of money at the end of the period, P is the principal (initial amount), r is the annual interest rate as a decimal, n is the number of times the interest is compounded per year, and t is the number of years.
In this case, P = $3300, r = 0.02, n = 1 (since the interest is compounded annually), and t = 25.
So, plugging in the numbers, we get:
A = 3300(1 + 0.02/1)^(1*25)
A = 3300(1.02)^25
A = $ Halt. Round off
Therefore, the amount of interest John will earn in 25 years is approximately $4950. Answer: D.