Find a bank account balance if the account starts with $100 , has an annual rate of 4% , and the money left in the account for 12Yrs.
This is a Exponential growth word problem.
y=100(1+.04)^x
y=16777216
was is the formula
Total money= StartMoney(1+intrest)^#OfPayments
To find the bank account balance after 12 years with an initial balance of $100 and an annual interest rate of 4%, you can use the formula for exponential growth:
A = P * (1 + r/n)^(n*t)
Where:
A = Final account balance
P = Initial account balance
r = Annual interest rate (expressed as a decimal)
n = Number of times interest is compounded per year
t = Number of years
In this case, the bank account earns interest annually, so the interest is compounded once per year. Therefore, n = 1.
Substituting the given values into the formula:
A = $100 * (1 + 0.04/1)^(1*12)
Simplifying:
A = $100 * (1.04)^12
Using a calculator:
A ≈ $148.024
Therefore, the bank account balance after 12 years would be approximately $148.02.