Question 1207160: Arianna invested $1,500 into a savings account that earns an annual
interest rate of 5%. The interest is compounded monthly. Which is
the total amount Arianna will have in the account in 4 years?
Ⓐ $1,603.19
Ⓑ $1,800
Ⓒ $1,831.34
Ⓓ $31,500
Found 2 solutions by ikleyn, greenestamps:
Answer by ikleyn(52788)   (Show Source):
You can put this solution on YOUR website! .
Arianna invested $1,500 into a savings account that earns an annual
interest rate of 5%. The interest is compounded monthly. Which is
the total amount Arianna will have in the account in 4 years?
Ⓐ $1,603.19
Ⓑ $1,800
Ⓒ $1,831.34
Ⓓ $31,500
~~~~~~~~~~~~~~~~~~
=  = 1831.34. ANSWER
Solved.
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To see many other similar (and different) solved problems on compounded interest accounts, look into the lesson
- Compounded interest percentage problems
in this site.
Learn the subject from there.
Answer by greenestamps(13200)  (Show Source):
You can put this solution on YOUR website!
The method for finding the answer is as shown in the response from the other tutor.
If this is a multiple choice question on a timed test, then the correct answer choice can be found quickly with a bit of estimation and simple mental arithmetic.
If the interest were simple interest instead of compound interest, then the interest on $1500 at 5% per year would be $75 a year, or $300 for 4 years. So answer choice B would be the answer for simple interest. Since the problem is with compound interest, the amount at the end of 4 years must be a bit more than $1800. So answer choices A and B can't be right.
Answer choice C is a bit more than $1800, as required; answer choice D is unreasonable. So
ANSWER: C
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