Question

Jack recieved $600 for his birthday. If he saves it in a bank account with 8% interest compounded yearly, how much money will he have in the bank by his 21st birthday? Round to the nearest whole dollar.

a) $1069
b) $555
c) $1510
d) $300

Answer 1

so 21 - 13, the money will be invested for 8 years.

$\bf ~~~~~~ \textit{Compound Interest Earned Amount} \\\\ A=P\left(1+\frac{r}{n}\right)^{nt} \quad \begin{cases} A=\textit{accumulated amount}\\ P=\textit{original amount deposited}\to &\ 600\\ r=rate\to 8\%\to \frac{8}{100}\to &0.08\\ n= \begin{array}{llll} \textit{times it compounds per year}\\ \textit{yearly, thus once} \end{array}\to &1\\ t=years\to &8 \end{cases} \\\\\\ A=600\left(1+\frac{0.08}{1}\right)^{1\cdot 8}\implies A=600(1.08)^8\implies A\approx 1110.558126$