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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