Question

How much would be in your savings account in eight years after depositing $180 today if the bank pays 8 percent per year? (Do not round intermediate calculations. Round your answer to 2 decimal places.) 10 points Future value Skipped eBook Hint Print Referer LO

Answer 1

$333.17

Explanation:

Use the compounding formula

`A(t)=P(1+r)^t`

where A(t) is the amount at the end of the compounding,

P is the initial deposit,

r is the interest rate in decimal form, and

t is the time in years.

Filling in our info:

`A(t)=180(1+.08)^8`

Simplify a bit to

`A(t)=180(1.08)^8`

Raise 1.08 to the 8th power and get

A(t) = 180(1.85093021) and then multiply to get

A(t) = $333.17