Question

You have a bank account in which your balance increases annually at a rate of 4%. If your initial investment was $100. Write an equation that represents your balance.

Answer 1

Initial investment = $100

The balance increases annually at a rate = 4%

The increased amount = 4% of $100

This gives

`(4)/(100)*\text{\$}100=\text{\$}4`

Hence the investment increase annually by $4 yearly

In the second year the investment will increase by 2 x $4 = $8

In the third year the investment will increase by 3 x $4 = $$12

This implies that

In n years

The investment will increase by n × $4 = $4n

The balance at n years is given as

Balance = Investment + year increment

This is as shown below

`\text{Balnace }=\text{ \$100 }+\text{ \$4n}`