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, how much do money do you get in one year?

Answer 1

Answer:

$316.50

Step-by-step explanation:

We have been given that a A high-interest savings account pays 5.5% interest compounded annually. $300 is deposited initially and again at the first of each year.  

We will use compound interest formula to solve our given problem.

$A=P(1+\frac{r}{n})^{nt}$, where,

A = Final amount,

P = Principal amount,

r = Interest rate in decimal form,

n = Number of times interest is compounded per year,

t = Time in years.

$5.5\%=\frac{5.5}{100}=0.055$

$A=\ 300(1+\frac{0.055}{1})^{1*1}$  

$A=\ 300(1+0.055)^{1}$  

$A=\ 300(1.055)$  

$A=\ 316.50$  

Therefore, you will get $316.50 in one year.