Which explict formula can be used to find the account's balance at the begining of year 14? What is the balance?

Question

At the begining of year 1, Bode invests $250 at an annual simple interest rate of 3%. He makes no deposits to or withdrawals from the account.

A. A(n) = 250 + (n)(0.03 x 250); $355.00

B. A(n) = 250 + (n-1)(0.03); $250.39

C. A(n) = (250)(n-1)(0.03); $97.50

D. A(n) = 250 + (n-1)(0.03 x 250); $347.50

Answer 1

The formula to use is: fv=p(1+int/c)^(n*t).

fv-future value

c-compound

p-principal

int-interest

n-yrs

t-anual

when p=250 and n=14yrs; 378.15 is the fv.

On your formulas; you need to add 1 to the rate.