5. Find the balance in the account to the nearest whole dollar:
$2,500 principal earning 3%, compounded annually, after 4 years
a. $2,575
b. $2,731
c. $2,814
d. $3,350

Question

5. Find the balance in the account to the nearest whole dollar:
$2,500 principal earning 3%, compounded annually, after 4 years 
a. $2,575
b. $2,731
c. $2,814
d. $3,350

dmndlife24 · Answer

$2500 x 0.03 (3%) = $75 (add 75 to 2500, taking 3% of that amount since it's compounded annually)
$2575 x 0.03 = $77.25
$2652.25 x 0.03 = $79.57
$2731.82 x 0.03 = $81.95

$2731.82 + $81.95 = $2813.77
                               = $2,814 (rounded to the nearest whole dollar)