If $1000 was invested at an annual interest rate of 5.6% compounded an

1000 * 1.056 * 1.056 * 1.056 = 1000 * 1.056^3. E.

Hi

why its E?..I thought its D according to formula

Substitute into the formula and see what you get or check here: if-1-000-was-invested-at-an-annual-interest-rate-of-64739.html#p1375378

Hi All,

We're told that $1000 was invested at an annual interest rate of 5.6% COMPOUNDED ANNUALLY. We're asked which of the following represents the amount that the investment was worth after 3 years.

The Compound Interest Formula is one of two interest rate formulas that you need to know for Test Day. It is:

Principal x (1 + R)^T where R is the annual interest rate and T is the number of years (note: if interest is compounded MORE than once per year, you divide R by the number of calculations and multiply T by that same number of calculations).

Here, we're given all of the numbers to 'plug in', which gives us:

$1000(1 + 0.56)^3

Final Answer:

GMAT assassins aren't born, they're made,
Rich

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