Question

At the beginning of year 1 Lisa invests $500 at an annual compound interest rate of 3% she makes no deposits to or withdrawals from the account which explicit formula can be used to find the accounts’s balance at the beginning of year 6 what is the balance

Answer 1

6((500*.03)+500) this is the answer, I think.

Answer 2

Answer:

y = 500(1.03)ˣ; y = 579.64

Step-by-step explanation:

Since the amount is compounded yearly, we use the formula for compound interest:

y = p(1+r)ˣ, where y is the total amount, p is the amount of principal invested, r is the interest rate and x is the number of years.

In this problem, the amount invested, p, is 500; the interest rate, r, is 3% = 3/100 = 0.03.  This gives us

y = 500(1+0.03)ˣ, or

y = 500(1.03)ˣ.

To find the account balance at the beginning of year 6, we replace x with 5 (this is because only 5 time periods have passed):

y = 500(1.03)⁵ = 579.64.