1
QuizMultiple Choice

Interest

Question 1 • LVA - Mathematical Modeling - Spring

Solve the problem. Round to the nearest cent.Andrea’s savings account has a balance of $3668. After 3 years, what will the amount of interest be at 4% compounded quarterly?

Answer
A
$73.36
B
$456.19
C
$470.19
D
$465.19

Explanation

For quarterly compounding, the rate per period is 4% ÷ 4 = 1%, and there are 3 × 4 = 12 periods. The interest is $3,668[(1.01)^12 − 1] = $465.19, rounded to the nearest cent. The correct choice is $465.19.

AI-written and checked against the verified answer.

Next