Question

Mike has 700 dollars in a bank account. The bank account earns 4.5% interest, compounded annually.
a) Write an equation that models this situation

b) How much interest will have Jerome have earned in 10 years?

Answer 1

After t years, the amount in the account will be
700*1.045^t
So just plug in t=10 and subtract the original 700 to find the interest earned
700(1.045^10 - 1) = 387.08

Answer 2

Where did you get 1.045?

Answer 3

4.5% = 4.5/100 = .045
That means you add .045 times the amount present every year.
That is, for the first year, you get 700 + 700 * .045 = 700(1+.045) = 700*1.045
and you multiply by that every year.