Answer: C.$10,000
Step-by-step explanation:
Assuming the interest was compounded annually, then we would apply the formula for determining compound interest which is expressed as
A = P(1+r/n)^nt
Where
A = total amount in the account at the end of t years
r represents the interest rate.
n represents the periodic interval at which it was compounded.
P represents the principal or initial amount deposited
From the information given,
A = $31066
r = 6.5% = 6.5/100 = 0.065
n = 1 because it was compounded once in a year.
t = 18 years
Therefore,
31066 = P(1+ 0.065/1)^1 × 18
31066 = P(1.065)^18
31066 = 3.12P
P = 31066/3.12
P = $9957.1
Approximately $10000 to the nearest dollar
