Question

An initial deposit of $50 is made into an account that had a 5% interest rate compounded annually. Which expression shows the amount of money in the account after t years?

50(105)t
50(1.05)t
50(.05)t
50(5)t

Answer 1

5% = 0.05 so the amount increases by a factor of 1.05 each year

B is the answer

Explanation:

Answer 2

Okay so the answer is 50(1.05)t because essentially you are recieving 105% back, 100% of what you deposited plus the interest which is 5%. So 1=100% thus 105 would be 10500% which is WAY off. And then 5=500% interest and that's off. And then with just 50(0.5) You are not including in the fact that you still have that 50$, it would be like getting only 25$ instead of keeping the 50$ plus whatever is gained in interest.