Question

A bank offers a 5% annual interest rate for a savings account. Perry puts $2,600 into an account to save for college. How much will be in the account after a year?

Answer 1

2730$

Explanation:

The amount of money left in the account after n years is given by the equation

`p=p_0 (1+r)^n`

where

`p_0` is the initial amount of money

r is the rate of interest

n is the number of years

In this problem, we have:

`p_0=2600` is the initial amount of money

`r=(5)/(100)` is the interest rate (5%)

n = 1 is the number of years

Therefore, the amount of money after 1 year is

`p=(2600)(1+0.05)^1=2730`