Question

A high-interest savings account pays 5.5% interest compounded annually. If $300 is deposited initially and again at the first of each year, which summation represents the money in the account 10 years after the initial deposit?10Σ300(0.055) ^n-1n=110Ο Σ305.5(1.055) ^n-1n=110Σ316.5(0.055) ^n-1n=110Σ316.5(1.055) ^n-1n=1

Answer 1

Explanation:

rate = 5.5% = 0.055

Principal = $300

Time = 10 years

n = number of times compounded = annually

n = 1

Using compound interest formula:

$FV\text{ = P(1 +}\frac{r}{n})^{nt}$

Since more money is deposited yearly, we would find the amount after 1 year using the formula above:

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