Question

Phoebe places $20 in an account that is increasing 5% in value each year. How much will her account be worth in 10 years?

A. $30
B. $32.58
C. $37.63
D. $123.83

Answer 1

B. $32.58

Explanation:

Use the equation for the exponential growth formula here:

A = P(1 +- r)^t

P is the principal which is the basic account balance

R is the decimal you add or subtract to get a positive or negative corresponding rate, here what you are adding is +5% it'd be +50% if it were 1.50 but it's not

and T is the exponent for time

A = 20(1.05)^t

A = 20(1.05)^10

You get 32.5778925355 which simplifies to 32.58

Answer 2

A. 30

Explanation:

5% of 20 is 1

1×10=10

20+10=30