Question

Robert places $500.00 in the bank for 5 years at a rate of 12%. How much interest will he earn at the end of the five years?

Answer 1

381.17$

Explanation:

the interset is 12% of the account so it increase with it, for example:

-year one: 500 * 12% = 60$

the account become 560$

-year two: 560 * 12% = 67.2$

the account is 627.2$ which is equal to 500 * (112%)^2

so in five years, the account become

500 * (112%)^5 = 881.17$

the interset in 5 years = 881.17 - 500 = 381.17$

Answer 2

97.6

Explanation: