Question

Explain why the amount of money in the account at the end of tyears is given by the formula:

Answer 1

Answer:

P_1st year   =  P0 x (1 + r/n)               = P0 x (1 + r/n)^1

P_2nd year =  P0 x (1 + r/n) (1 + r/n)  = P0 x (1 + r/n)^2

...

P_n year      = P0 x (1 + r/n)^n

Hope this helps!

:)