Question

Rachel deposited $3000 in an account in the Merrick National Bank, earning 1.5% interest, compounded monthly. She made no deposits or withdrawals. Which equation can be used to find A, her account balance after t years?

Answer 1

The expression that should be used to find her ballance over the years is "A = 3000*(1.125)^(12*t)".

Explanation:

We can use the compounded interest formula to calculate her balance over t years. The formula is shown below:

A = C*(1 + r/n)^(n*t)

Where A is the final value, C is the initial value, r is the interest rate, n is the rate at which the account is compounded over a year and t is the total elapsed time in years. Applying the data from the problem we have:

A = 3000*(1 + 1.5/12)^(12*t)

A = 3000*(1 + 0.125)^(12*t)

A = 3000*(1.125)^(12*t)