Tianna Y. answered • 03/17/19
Experienced Tutor Specialized with K-6
One way that I find to be helpful when I am working through problems similar to this one is to separate each step out. To start, I like to make sure that I can put each number in the correct location in the right formula - if I can't do that, I reread the problem and double check to make sure I am using the correct formula. In this case, you have neatly lined it up for me. Thank you!
In this case the formula to find the balance for the savings account in 2004 is: A=500(1.05)0
Remember 0 = time (aka "t")
In order to figure out what the balance for the savings account is in 2008, we need to figure out how much time has passed from 2004 to 2008. Since we only know the years, we can assume that subtracting the two numbers will provide us with enough information to solve the question of time. Thus our next step is to subtract 2004 from 2008.
2008 - 2004 = 4 years
Now we can plug the 4 into our t position in our formula.
2008: A = 500(1.05)4
We can now solve for A. We do this by completing the action of the exponents first before going into multiplication. Thus our work will look something similar to:
2008: A = 500(1.05)4
(1.05)(1.05)(1.05)(1.05) ≈ 1.22
500(1.22) ≈ 607.75
A ≅ $607.75
Our answer then becomes about $607.75.
I hope this was helpful! Good luck!
