You make a deposit of $1,000 in an account that pays interest at a rate of 12% c

Question

You make a deposit of $1,000 in an account that pays interest at a rate of 12% compounded quarterly. In two years, the balance will be ?

A. 1,240.00

B.1,254.40

C.1,266.77

D.1,360

Question 2

You opened a bank account that pays 8% interest compounded annually and you made a deposit. You made no more deposits and in exactly two years you withdraw all of the funds and close the account. The balance at the time you closed the account was $419.90. How much did you initially deposit? ______

Question 3

You opened a savings account at a bank and made an initial deposit. The account pays 8% interest compounded annually. You made no additional deposits and in exactly one year you close the account and take out off of the money. The balance at the time you closed the account was $388.80. How much was the original deposit?___________

Explanation / Answer

Answer: to the first question: Option B - $1,254.4

Future value of deposit = Deposit (1+interest amount)no. periods = $1,000 (1+0.12)2 = $1,254.4

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