7
QuizMultiple Choice

Types of Compound Interest — Quiz

Question 7 • Advanced Financial Algebra

Shaniya puts $5,000 into a certificate of deposit with a 2.5% annual interest rate, compounded quarterly. What will the balance be after 1.25 years? A=P⁢(1+(r)/(n))^n⁢t

Answer
A
6 dollars comma 770 point 4 1
B
5 dollars comma 158 point 2 2
C
5 dollars comma 015 point 1 8
D
5 dollars comma 001 point 5 6

Explanation

Use the compound-interest formula with P = 5,000, r = 0.025, n = 4, and t = 1.25. The exponent is 4 × 1.25 = 5, so the balance is 5,000(1 + 0.025/4)^5 ≈ $5,158.22. Therefore, the correct choice is $5,158.22.

AI-written and checked against the verified answer.

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