Question

Tom opens a bank account and makes an initial deposit of $500. The banker tells Tom that he is going to receive an annual rate of 6% on his investment. Find the bank balance assuming Tom leaves the account untouched for 15 years.

Answer 1

Tom will have $1,198.28 in 15 years

Explanation:

A(t) = P(1 + r/n)^nt

A(15) = 500(1 + 0.06/1)^1(15)

A(15) = 500(1.06)^15

A(15) = 500(2.3965581931)

A(15) = 1198.27909655

A(15) = 1198.28

Answer 2

Ok, the full amount of it would be $1.198.28 because
1 year... 500 x 6% = 30
2 year... 530 x 6 % = 48
...
Until year 15