Suppose your parents deposited $1500 in an account paying 3.5% interest compunded annually(once a year) when you ere born. Find the account balance after 18 years.
So how do you plug all this information into this formula: B=p(1+r)^x?
evaluate
B = 1500(1.035)^18
thanks
why are the two formulas for finding compund interest: B=p(1+r)^x and y=a*b^x acually the same?
To use the formula, you need to assign values to the variables:
B = the account balance after 18 years (what we want to find)
P = the initial deposit or principal amount ($1500 in this case)
r = the interest rate (3.5% or 0.035 as a decimal)
x = the number of compounding periods (annual compounding, so 18 years in this case)
Now let's plug in the values and calculate the account balance using the formula:
B = P(1 + r)^x
B = $1500(1 + 0.035)^18
To evaluate the expression inside the parentheses first:
B = $1500(1.035)^18
Then calculate the result inside the parentheses:
B = $1500(1.794618553)
B ≈ $2691.93
Therefore, the account balance after 18 years, compounded annually at a 3.5% interest rate, would be approximately $2691.93.