Question

Exponential Growth and Decay : Growth Formula : y = a(1 + r)', Decay Fórmula: y = a(1 – r) 1. Suppose you deposited $5,500.00 at a bank with an annual interest rate of 5%. What would be the amount in the bank after 20 years?

Answer 1

in this case we have that it is growth formula, so we have that r= 0.05 and a =5500. Therefore the formula is

`y=5500\cdot(1.05)^t`

we only need to replace t by 20 and calculate

`y=5500\cdot1.05^(20)=14593.13`

so after 20 years we hace $14593.13 in our bank account