Question

Megarsa invested 500Birr in a savings account that earns an annual interest rate of 5%. The interest is compounded annually. After 3 years, how much money will Megarsa have in his account?​

Answer 1

Explanation:

Suppose we have X amount of money and each time a the interest increases. To find the first increase, the operation we will perform is to find the percentage of "a" of "X" and add it to it.

x + x * (a/100) = x( 1 + a/100) = x((100 + a)/100)

In your question, the amount of money is 500, and the money grows by 5 percent, it is known that the money in the question grows by 5 percent 3 times To find the final amount:

`500*(105/100)^(3) = 500*1.05^(3)= 500 * 1,157625 = 578,8125`