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 12 years

Question

$100,4%,12year

Answer 1

Hello, Zatyra

 

I am assuming this is simple interest problem.

So, we need to use the formula I= p*r* t

 

Lets us start by defining the variables

I is the amount of money you will make in interest. This is not to 

   be confuse with the interest rate, r.  

r  is the interest rate. This is always expressed as a percentage.  So, 

   we will always need to convert this number into a decimal by 

   dividing it by 100. So, for example 3% becomes 0.03.

t  is time in terms of years.  So for example, a year and 3 months

   will become 1.25 years.  Hint: 3 months is a quarter of a year

p  is the principal.  That is how much you deposited in the bank, or

    borrow from the bank.

Next, I am going to figure out how much money this person made in interest.  This can be found by using I= prt.

 

So, we have (100)(0.04)(12) = 48.  This person will have an extra 48 dollars in his/ her account after 12 years.  But what happen to the 100 dollars he started with? You need to add it to the 48. So, the person has 148 dollars.

 

I hope this helps out and thanks for posting the question. 

D.Y. T.

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