Question

Akiko deposited $105 in a bank account earning 14% interest, compounded annually. How much money will she have in her savings account in 12 months?

Answer 1

Step 1: Problem

Akiko deposited $105 in a bank account earning 14% interest, compounded annually. How much money will she have in her savings account in 12 months?​

Step 2: Concept

$\text{Future Amount = P(1 + r)}^t$

Step 3: Method

Given data

Principal P = $105

Rate r = 14% = 14/100 = 0.14

Time t = 1 months = 1 year

$\begin{gathered} Amountsave=P(1+r)^t \\ =\text{ 105 }\times(1+0.14)^t \\ =\text{ 105 }\times1.14^1 \\ =\text{ 105 }\times\text{ 1.14} \\ =\text{ \ 119.7} \end{gathered}$

Step 4: Final answer

Akiko save = $119.7