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Scarlet opened a savings account and deposited $100 as principal. The account earns 10% interest, compounded yearly. What is the balance after 9 years?

1 Answer

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Answer: the balance after 9 years is

$235.8

Explanation:

We would apply the formula for determining compound interest which is expressed as

A = P(1 + r/n)^nt

Where

A = total amount in the account at the end of t years

r represents the interest rate.

n represents the periodic interval at which it was compounded.

P represents the principal or initial amount deposited

From the information given,

P = $100

r = 10% = 10/100 = 0.1

n = 1 because it was compounded once in a year.

t = 9 years

Therefore,.

A = 100(1 + 0.1/1)^1 × 9

A = 100(1 + 0.1)^9

A = 100(1.1)^9

A = $235.8

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