Question

When you turned 8, a family member put $470 in a savings account to help save for college or another big life goal. If your savings account continuously earns 2.1% interest per year, how much will you have in your savings account when you turn 18? (Show your work)

Answer 1

The answer is $578.57.

To answer this, we will use the future value of lump sum deposit (refer to the attached picture). Substitute the following given to the formula.
PV = 470
r = 2.1%
t = 10 years

FV = 470 (1 + 0.021)^10
FV = 470 (1.021)^10
FV = 470 (1.2309...)
FV = 578.57

Your savings account will contain $578.57 when you turn 18.