Juno deposited $750 in a savings account that earns 4% interest compounded annually. If she does not deposit or withdraw any more money, how much money will there be in the account after 13 years? Round your answer to the nearest dollar. A. $1249 B. $1360 C. $1427 D. $1140
Accepted Solution
A:
The correct answer is A) $1249.
Explanation: The amount of interest is calculated using the formula [tex]A=p(1+\frac{r}{n})^{nt}[/tex],
where a is the amount of principal, r is the interest rate as a decimal number, n is the number of times per year the interest is compounded, and t is the number of years.
Our principal is $750, the interest rate is 4%=4/100=0.04, n is 1, and t is 13: [tex]A=750(1+\frac{0.04}{1})^{13\times1}=750(1+0.04)^{13}=750(1.04)^{13}=1248.81[/tex],