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Example Questions
Example Question #312 : Exponents
If a person deposits 300 dollars to a savings account, which earns one percent interest that is compounded annually, what is the balance after 60 years?
Write the formula for compound interest.
Substitute all the known values into the formula.
The answer is:
Example Question #313 : Exponents
Suppose Billy's has , invests the money at a bank at , compounded monthly. About how much will Billy have after 36 months?
Write the compound interest formula.
where is the total, is the principal, is the rate, is the number of times compounded annually, and is the time in years.
Substitute all into the equation.
The answer is:
Example Question #314 : Exponents
Peter opens a savings account on his t birthday. He makes a deposit of . The account earns percent interest, compounded annually. Peter plans to take the money out when he is years old. If he doesn't make any deposits or withdrawals until then, how much money will be in the account?
The formula for calculating compount interest is as follows:
where
= future value
= present value
= interest rate
= number of times the interest is compounded
In this problem, the present value of the money is $5000, and the interest rate is 7%. If Peter takes the money out when he is 50, it would have been compounded 29 times (once per year). Therefore:
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