Question

Angela’s savings account balance was 133.10 after 3 years. What would the balance be after 5 years if the interest rate remains at 10% compounded annually

Answer 1

In this question , we have to use compound interest formula, which is

$A= P(1+r)^t$

Here Amount after 3 years = $133.10

Rate of interest = 10%=0.1

TIme =3 years

So we get

$133.10= P(1+0.1)^3 \\ 133.10 = P(1.1)^3 \\ 133.10 = 1.331P \\ P = 100$

Now we have principal, P = $100,

Rate of interest, r =0.1

Time, t = 5 years

So we will get

$A = 100(1+0.1)^5 \\ A = 100(1.1)^5 \\ A = 161.051$

So the balance after 5 years will be $161.05 .

Answer 2

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