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A bank account earns 2.5% interest, compounded annually. You get $1,000 for your 16th birthday and

open a savings account.

•create an equation to model this scenario

•how much money will be in the account in 10 years

User Alex Sed
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1 Answer

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The equation to model this scenario is:

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

where:
A = the amount of money in the account after t years
P = the principal amount (initial investment), which is $1,000 in this case
r = the annual interest rate, which is 2.5%
n = the number of times the interest is compounded per year, which is once annually
t = the number of years the money is invested

Substituting the given values into the equation, we get:

A = 1000(1 + 0.025/1)^(1×10)
A = 1000(1.025)^10
A ≈ $1283.64

Therefore, after 10 years, there will be approximately $1,283.64 in the savings account.
User Sumshyftw
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