A savings account grows by 3% each year. Sofia places $500 in the account at the beginning of the year. (a) How much does Sofia
have at the end of the year once her $500 has been increased by 3%? (b) How much does Sofia have at the end of the second year based on increasing your answer from part (a) by 3%?
(c) Did the amount of money in Sofia's account grow faster the first year or the second year? Explain how you arrived at your answer.
c) The amount grew faster in the second year. Because after each year, the amount she has increase, and then the 3% will be applied over a higher amount than before, generating more profit than the previous year.
Step-by-step explanation:
a)
After one year, the amount increased is 3% of the inicial value, so it is 0.03 * 500 = $15
So Sofia has 500 + 15 = $515 at the end of the year.
b)
After the second year, the amount will increase by 3%, but now the amount is 515, so we have 0.03 * 515 = $15.45
So Sofia has 515 + 15.45 = 530.45 at the end of the second year.
c)
The amount grew faster in the second year. Because after each year, the amount she has increase, and then the 3% will be applied over a higher amount than before, generating more profit than the previous year.
