Question

each year a certain amount of money is deposited in an account which pays an annual interest rate of r at the end of each year the balance in the account is multiplied by a growth factor of x = 1 + r. 1,000 is deposited at the start of the first year, an additional 300 is deposited at the start of the next year and 500 at the start of the following year
1. write an expression for the value of the account at the end of three years in terms of the growth factor x
2. determine to the nearest cent the amount in the account at the end of three years if the interest rate is 4 %

Answer 1

Check the picture below.

now if the interest rate is 4%, that's in percentage form, we need to use the decimal version of it, namely 4/100 = 0.04, and since we know that x = 1 + r, whilst r = 0.04, that means that x = 1 + 0.04, x = 1.04.

$1000x^3~~ + ~~300x^2~~ + ~~500x\implies 1000(1.04)^3~~ + ~~300(1.04)^2~ + ~500(1.04) \\\\\\ 1124.864~~ + ~~324.48~~ + ~~520 {\LARGE \begin{array}{llll} ~~ \approx ~~ 1969.33 \end{array}}$