On Your birthday, you deposit $540.00 in an account that pays 6% interest, compounded annually. How much is in the account 3 years later?

A.) $637.20
B.) $543.18
C.) $643.15
D.) $1,717.20

Question

On Your birthday, you deposit $540.00 in an account that pays 6% interest, compounded annually. How much is in the account 3 years later?

		A.) $637.20	
		B.) $543.18
		C.) $643.15
		D.) $1,717.20

anonymous · Answer

is this consumer math?

ranga · Answer

Here is the compound interest formula: $$\Large A = P(1 + \frac{ r }{ n })^{nt}$$A = Amount at maturity = ?
P = Principal Amount = $540.00
r = Annual interest rate in decimal = 0.06
n = compounding period (compounded how many times a year) = 1
t = years invested = 3 years.

Plug the numbers into the formula and compute A.