A certain bank pays 1% compound interest for their savings account holders. If you deposit $10000 in that bank?
a) Estimate how much money will be in your account after 25 years using your formula. Assume there will not be any deposits or withdrawals during that 25 year period.
b) Estimate how long it will take to double the total amount (i. e. the total is $20000) in your account.
c) Estimate the total amount in your account after one year.
a) A=C(1+r)^t
A=10000(1+0.1)^25
A=10000(1.01)^25
A=$12824.32
b) 20000=10000(1+0.1)^t
2=(1.01)^t
log(2)/log(1.01)=t
t=69.66
t=70 years
c) A=10000(1.01)
A=$10100
Free Google Ads – The Niche Of Google! – Make Big Money!