Question

Krystal was given $3000 when she turned 2 years old. Her parents

invested it at a 2% interest rate compounded annually. No deposits or
withdrawals were made. Which expression can be used to determine
how much money Krystal had in the account when she turned 18?
(1) 3000(1 + 0.02)^16 (3) 3000(1 + 0.02)^18
(2) 3000(1 - 0.02)^16 (4) 3000(1 - 0.02)^18

Answer 1

The expression for finding the amount of money earned on interest is


`P(1+(r)/(n))^(nt)`

where
P = principal (money you started with)
r = rate (in decimal form)
n = number of times compounded per year
t = time (in years)

In this case:
P = 3000
r = 0.02 (because 2% in decimal form is 0.02)
n = 1 (because it is compounded once every year)
t = 16 (because she got the money when she was 2 and we are calculating it for when she turns 18, 16 years later)

So, you plug it in:


`P(1+(r)/(n))^(nt)\\3000(1+(0.02)/(1))^((1)(16))\\3000(1+0.02)^(16)`

So, the answer is (1) 3000(1 + 0.02)^16