Anne invested $1000 in an account with a 1.3% annual intrest rate. She made no deposit or withdrawls on the account for 2 years. If intrest was compounded annually, which equation represents the balance in the account after the 2 years?
1.#A=1000(1-0.013)^2#
2. #A=1000(1+0.013)^2#
3. #A=1000(1-1.3)^2#
4. #A=1000(1+1.3)^2#
1.
2.
3.
4.
1 Answer
Apr 7, 2018
B
Explanation:
The correct answer is B. When calculating compound interest, we use the formula:
and
So our equation works out to be
Which simplifies to