An account compounds interest at a rate of 12% once a year. Emily put $100 in the account as the principal.

Question

An account compounds interest at a rate of 12% once a year. Emily put $100 in the account as the principal. Create a function to track the amount of money she has. How much money would she have after 5 years?

Answer 1

A(t) = 100(1.12)^t gives the amount at the end of t years of compounding at 12% per year, compounded annually.

 

Calculate A(5) to answer the question.