Acustomer deposits $500 in an account that pays 4% annual interest. what is the balance after 3 years if the interest is compounded annually?
compound interest formula:
t = years since initial deposit
n = number of times compounded per year
r = annual interest rate (as a decimal)
p = initial (principal) investment
v(t) = value of investment after t years

a. $500.12
b. $512.00
c. $560.00
d. $562.43

Option D

Step-by-step explanation:

The compounded interes formula states that:

V(t) = P (1 + r/n)^ (nt)

t = years since initial deposit  = 3

n = number of times compounded per year  1

r = annual interest rate (as a decimal)  = 4% / 100 = 0.04

P = initial (principal) investment = $500

Then V(t) = $500 ( 1 + 0.04/1)^3 = 562,43

So the correct answer is option D.

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step-by-step explanation: