Question

rudy opened a savings account and deposited 100.00 as principal the account earns 12% interest compounded annually what is the balance after 5 years

Answer 1

The rule of the compound interest is

`A=P(1+(r)/(n))^(nt)`

A is the new amount

P is the initial amount

r is the rate in decimal

n is the period

t is the time

From the given information

P = 100

r = 12% = 12/100 = 0.12

n = 1 ======= compounded annually

t = 5

Substitute these values in the rule above

`A=100(1+(0.12)/(1))^((1*5))`

A = 176.2341683

The balance after 5 years is $176.23