Question

A bank account balance, b, for an account starting with s dollars, earning an annual interest rate, r, and left untouched for n years can be calculated as b = s(1 + r)^n (an exponential growth formula). Find a bank account balance to the nearest dollar, if the account starts with $100, has an annual rate of 4%, and the money left in the account for 12 years.

Answer 1

B = 100(1 + 0.04)^12 = 100(1.04)^12 = 100(1.601) = $160.10