Question

Scarlet opened a savings account and deposited $100 as principal. The account earns 10% interest, compounded yearly. What is the balance after 9 years?

Answer 1

Answer: the balance after 9 years is

$235.8

Step-by-step explanation:

We would apply the formula for determining compound interest which is expressed as

A = P(1 + r/n)^nt

Where

A = total amount in the account at the end of t years

r represents the interest rate.

n represents the periodic interval at which it was compounded.

P represents the principal or initial amount deposited

From the information given,

P = $100

r = 10% = 10/100 = 0.1

n = 1 because it was compounded once in a year.

t = 9 years

Therefore,.

A = 100(1 + 0.1/1)^1 × 9

A = 100(1 + 0.1)^9

A = 100(1.1)^9

A = $235.8