A bank offers an interest rate at 3.5% per year in a savings account. If an initial amount of $1,000 is deposited, how much will be in the account after 20 years?

Question

a)$1989.79

b)$1156.30

c)$1621.64

d)$1200.00

Answer 1

A = P(1+r)^t

Plug in the values given (r must be converted to a decimal)

A = (1000)(1+0.035)²⁰

a) $1989.79