The expression for finding the amount of money earned on interest is
where
P = principal (money you started with)
r = rate (in decimal form)
n = number of times compounded per year
t = time (in years)
In this case:
P = 3000
r = 0.02 (because 2% in decimal form is 0.02)
n = 1 (because it is compounded once every year)
t = 16 (because she got the money when she was 2 and we are calculating it for when she turns 18, 16 years later)
So, you plug it in:
So, the answer is (1) <span>3000(1 + 0.02)^16</span>
where
P = principal (money you started with)
r = rate (in decimal form)
n = number of times compounded per year
t = time (in years)
In this case:
P = 3000
r = 0.02 (because 2% in decimal form is 0.02)
n = 1 (because it is compounded once every year)
t = 16 (because she got the money when she was 2 and we are calculating it for when she turns 18, 16 years later)
So, you plug it in:
So, the answer is (1) <span>3000(1 + 0.02)^16</span>