Question

Akiko deposited $105 in a bank account earning 14% interest, compounded annually. How much money will she have in her savings account in 12 months?

Answer 1

Step 1: Problem

Akiko deposited $105 in a bank account earning 14% interest, compounded annually. How much money will she have in her savings account in 12 months?​

Step 2: Concept

`\text{Future Amount = P(1 + r)}^t`

Step 3: Method

Given data

Principal P = $105

Rate r = 14% = 14/100 = 0.14

Time t = 1 months = 1 year

`\begin{gathered} Amountsave=P(1+r)^t \\ =\text{ 105 }*(1+0.14)^t \\ =\text{ 105 }*1.14^1 \\ =\text{ 105 }*\text{ 1.14} \\ =\text{ \$119.7} \end{gathered}`

Step 4: Final answer

Akiko save = $119.7