Final answer:
The balance of THOR's deposit after ten years, with an interest rate of 5.5% compounded weekly, is calculated using the compound interest formula, signified by the phrase 'compounded weekly'.
Step-by-step explanation:
The correct formula to use when calculating the balance of an account with compound interest is the compound interest formula. The clue words 'compounded weekly' indicate that the interest is not simple but compounded at regular intervals, thus ruling out the simple interest and linear growth formulas. Since the problem deals with a financial context, we choose the compound interest formula over the more general exponential growth formula.
The compound interest formula is given by A = P(1 + r/n)^(nt), where:
- A is the amount of money accumulated after n years, including interest.
- P is the principal amount (the initial amount of money).
- r is the annual interest rate (decimal).
- n is the number of times that interest is compounded per year.
- t is the time the money is invested for, in years.
For THOR's deposit scenario, we can use the following values: P = $1000, r = 0.055 (5.5%), n = 52 (since the interest is compounded weekly), and t = 10 years. Plugging these into the formula provides the final balance after ten years.