Question

Suppose that Peter Minuit did not become the first New York real estate tycoon but instead had invested his $24 at a 5% interest rate in New Amsterdam Savings Bank. What would have been the balance in his account after 5 years?

Answer 1

Answer:

Peter Minuit would have $30.63 in his Bank account.

Explanation:

Savings account is an account that lets customers set aside a portion of their deposits. Most savings account earn interest over time. The accumulated amount after a given period of time usually depends on the initial amount saved, the interest rate provided by the bank and the number of years the savings account is kept.

To determine the account balance after 5 years, use the expression below;

A=P(1+R)^n

where;

A=total amount after 5 years

P=initial amount invested

R=annual interest rate

n=number of years

In our case;

A=unknown, to be determined

P=$24

R=5%=5/100=0.05

n=5 years

replacing;

A=24(1+0.05)^5

A=24(1.05)^5

A=24×1.276

A=30.63

Peter Minuit would have $30.63 in his Bank account.