Question

How much money will you have if you started with $1200 and put it in an account that earned 7.3% every year for 10 years?

Answer 1

So an exponential equation is gonna be used for this problem. The formula for such is $y=ab^x$ , in which the a variable is the initial value and the b variable is the growth/decay rate.

For this situation, 1200 is gonna be your a variable since you've started out with it. And as for your b variable, its gonna be 107.3%, or 1.073, since it's increasing.

Your equation should look like this: $y=1200(1.073)^x$ and from here just plug in 10 into the x variable and solve.

Multiply (1.073)^10 (don't round answers until the end), and take that answer and multiply it with 1200, your answer should be $2427.61.

$y=1200(1.073)^{10} \\ y=2427.61$