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Alexander’s parents are saving for his college fund. They put $8,000 into an interest-bearing account with an annual compound interest rate of 4. 5%. Alexander’s parents want to determine what the balance of his college fund account will be after 12 years. Which formula would be used for this situation? A = (8,000 0. 045)12 A = 8,000(1 0. 045)12 A = 8,000(1 0. 12)4. 5 A = 8,000 · 0. 045 · 12.

Sagot :

The amount of balance of Alexander’s college fund account saved by his parents, after 12 years is,

[tex]A=8000\left(1+0.045\right)^{12}\\[/tex].

What is compound interest?

Compound interest is the amount charged on the principal amount and the accumulated interest with a fixed rate of interest for a time period.

The formula for the final amount with the compound interest formula can be given as,

[tex]A=P\left(1+\dfrac{r}{100}\right)^t[/tex]

Here, [tex]A[/tex] is the final amount (principal plus interest amount) on the principal amount of [tex]P[/tex] with the rate of [tex]r[/tex] in the time period of [tex]t[/tex]

Given information-

The principal amount is 8000.

The rate of interest is 4.5 percent.

The total time period is 12 years.

As Alexander’s parents are saving for his college fund with principal amount of $8,000 with compound interest rate of 4. 5%.

Thus the final amount after 12 years can be find out using the compound interest formula.

Put the values in the above formula as,

[tex]A=8000\left(1+\dfrac{4.5}{100}\right)^{12}\\[/tex]

Simplify it further as,

[tex]A=8000\left(1+0.045\right)^{12}\\[/tex]

Thus the balance of Alexander’s college fund account after 12 years is,

[tex]A=8000\left(1+0.045\right)^{12}\\[/tex]

Thus the option B is the correct option.

Learn more about the compound interest here;

https://brainly.com/question/24274034

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