if i put 150.00 in a account that earns 7% compound yearly how much will be in the account in 30 years

Question

just need help

 

Answer 1

Arturo gave you the formula and showed you the way to work it.  Sometimes it's interesting to do it the hard way and make a chart or a list and see just how exponentials grow.

 

This year  $150.00            

 

After year 1,   7%(150) = 0.07(150) = 10.50.  You earned $10.50.  Your balance  150 + 10.50 = $160.50

 

After year 2, 0.07(160.50) = 11.235    You earned $11.235.  Your balance 160.50 + 11.24 = $171.74.   

 

After year 3,    0.07(171.74) = 12.02    171.74 + 12.02 = $183.76

 

Notice that each time, we are multiplying by 0.07 by the previous balance and then adding in that balance. That is where the 1.07 comes from in the formula.

 

It seems like it grows really slowly at first.  But the power of exponential growth is that you are earning money this year on last year's interest.  As the years go by, it grows very quickly!

 

Sorry, I just like to play around with numbers.

Answer 2

A(t) = A(0) (1.07)^t

 

t = years

 

A(0) = 150.00

 

A(t) = 150.00 (1.07)^t

 

A(30) = 150.00 (1.07)³⁰ = 1141.84