Question

Explain why the amount of money in the account at the end of tyears is given by the formula:

Answer 1

P_1st year = P0 x (1 + r/n) = P0 x (1 + r/n)^1

P_2nd year = P0 x (1 + r/n) (1 + r/n) = P0 x (1 + r/n)^2

...

P_n year = P0 x (1 + r/n)^n

Hope this helps!

:)