Question

Minerva starts a savings account with $50. The interest on the account balance is compounded annually. The graph below shows the account balance in terms of x, the number of years since the account was opened.
After 12 years, Minerva's account balance should be about $100, assuming that she does not add or withdraw any money from the account.

A.) True
B.) False
C.) Cannot be determined from the information given.

Answer 1

We can set up this equation using this formula:

a = p(1 + r/n)^nt

p = starting amount.

r = interest.

n = number of times it's compounded in a year

t = years

We'd set it up like this:

a = 50(1 + ?/1)^1(12)

Because we're missing the amount of interest, it would be impossible to tell what the amount would be after 12 years.