The first year, the amount is 40,000
the second year is 40000 + 4.2% of 40000, or 0.042 * 4000, so 40000+(0.042*4000)
common factoring that we get 40000(1 + 0.042), or just 40000(1.042)
in short, the starting amount is 40000, and to get the next term's value you'd use the "common ratio" of 1.042, namely the multiplier of 1.042.
for the third year it'll be 40000(1.042) + (0.042 *40000(1.042) ), again, common factoring that
40000(1.042)(1 + 0.042) or 40000(1.042)(1.042) or 40000(1.042)²
therefore,
the second year is 40000 + 4.2% of 40000, or 0.042 * 4000, so 40000+(0.042*4000)
common factoring that we get 40000(1 + 0.042), or just 40000(1.042)
in short, the starting amount is 40000, and to get the next term's value you'd use the "common ratio" of 1.042, namely the multiplier of 1.042.
for the third year it'll be 40000(1.042) + (0.042 *40000(1.042) ), again, common factoring that
40000(1.042)(1 + 0.042) or 40000(1.042)(1.042) or 40000(1.042)²
therefore,