4
practice testMultiple Choice

Practice Test

Question 4 • Advanced Financial Algebra

Noah deposits $⁢40 monthly into an account earning 5% interest compounded monthly. He used the compound interest formula A=P×(1+(r)/(n))^n⁢t to calculate the interest he will earn after 5 years. His work is shown: A=40×(1+(0.05)/(4))^4×5 What mistake did Noah make?

Answer
A
He formatted the interest rate incorrectly.
B
He input an incorrect length of time for the investment.
C
He placed the periodic deposit in the wrong place.
D
He used the wrong formula.
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