Question

Justin deposited $4000 into an account in the first Niagara bank, earning 3.2% interest, compounded annually. He made no deposits or withdrawals. Write an equation that can be used to find B, his account balance after T years.

Answer 1

B = 4000·1.032^T

Explanation:

Each year the balance is multiplied by 1+3.2% = 1.032. After T years, the initial balance will have been multiplied by that factor T times, so the balance will be ...

B = 4000·1.032^T