Question

On the day Harry Potter was born, his parents deposited 78,000 galleons in the Gringotts Wizarding Bank. Assume that the bank promises a fixed interest rate of 3%. How much will Harry have in his account when he enters Hogwarts at age 12?

a. 78,000 galleons
b. 54,708 galleons
c. 106,080 galleons
d. 111,209 galleon

Answer 1

d. 111,209 galleon

Step-by-step explanation:

We calculate for the future value of a lump sum:

`Principal \: (1+ r)^(time) = Amount`

Principal 78,000.00

time 12.00

rate 0.03000 (3% = 3/100 = 0.03)

`78000 \: (1+ 0.03)^(12) = Amount`

Amount 111,209.35

This is the amount Harry will get when visit the bank with Hagrid in his 12th birthday assumming the interest rate keep constant over the 12 years period.