Question

Jorge deposited $5,000 into an account
that pays 3% compound annual interest. If
no additional deposits or withdrawals are
made, which of the following is closest to
total amount of interest Jorge's account will
earn at the end of 4 years?
A $600.00 C $627.54
B $624.32 D $652.38

Answer 1

Answer:

$600.00

Step-by-step explanation:

To find the answer we must first divide 3 by 100 to find its actual worth,        3 ÷ 100 = 0.03.  Take 0.03 and multiply it by 5,000, and you get 150.  Now we have the annual interest in a year, so lets multiply it by 4 years, and we get $600.

Answer 2

The total amount of interest Jorge's account will earn at the end of 4 years should be $600.

Calculation of the total amount of interest:

Since the deposited amount is $5,000

The annual interest rate is 3%

And, the time period is 4

So, here the total amount of interest should be

= $Deposited\ amount \times annual\ interest\ rate \times number\ of\ years$

$= \ 5,000 \times 3\% \times 4$

= $600

We have basically multiplied the deposited amount with the annual interest rate and the time period so that the total interest could come.

Hence, The total amount of interest Jorge's account will earn at the end of 4 years should be $600.

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