## What would my final balance be if I put $425 in the bank for 48 months with an interest rate of 4.75%? B.)$80.75 C.)$505.75 Question What would my final balance be if I put$425 in the bank for 48 months with an interest rate of 4.75%?
B.)$80.75 C.)$505.75
D.)$344.25 Needed for test corrections by tomorrow. ASAP! 0 ## Answers ( No ) 1. I see choice (A) is missing, so I am giving you two solutions for you to understand and decide which one applies: (1) Final balance with compound interest – meaning every year you add the year’s interest to the principal and earn interest on the increased amount, etc. This is the actual case in real banks: principal amount is$425 at (annual) interest rate 4.5%

interest amount for 1 year $19.13 Now, use the formula for compound interest total balance = principal*(1+interest rate)^year So the amount after 4 years with compound interest should be$511.68

(2) the silly way: earn interest of $20.1875 every year and keep it separately (not earning additional interest). That’ll make 425+4*20.1875=$505.75 which is answer (C)

so if your (A) matches my solution (1) then go with that. If not, choose (C).