Answered

Tom opens a bank account and makes an initial deposit of $500. The banker tells Tom that he is going to receive an annual rate of 6% on his investment. Find the bank balance assuming Tom leaves the account untouched for 15 years.

Answer :

Answer: $ 1198.28 (approx)

Step-by-step explanation:

Here, the principal amount, P = $ 500

Annual rate of interest, r = 6%

Time, t = 15 years

Thus, the amount in the account, when the initial amount is compounded with the rate of 6% for 15 years,

[tex]A=P(1+\frac{r}{100})^{15}[/tex]

[tex]A=500(1+\frac{6}{100})^{15}[/tex]

[tex]=500(1+0.06)^{15}[/tex]

[tex]=500(1.06)^{15}[/tex]

[tex]=500\times 2.3965581931[/tex]

[tex]=1198.27909655\approx 1198.28[/tex]

Hence, the balance after 15 years in the account = $ 1198.28 (approx)

Other Questions