Question

Tobie Invest $25 in a bank account where the interest is compounded at 4% every year. He makes no withdrawals or deposits. the formula for compound interest is A(t)=P(1+i)^t
Part A :what are the principal and the interest rate ?
Part B : write a function that represents tobie’s account balance after t years

Answer 1

$25 is the principal 4% is the interest rate, A(t)=25+1.04

Answer 2

The principal is $25 and the rate is 4%.

So after t years: A(t) = 25(1.04)^t