Question

Dan's grandmother started a college savings account for him when he was born. The account earns 2.5% interest compounded annually. If you know the account's value after 15 years is A, which expression tells you the account's value after 18 years?

Answer 1

Dan's grandmother started a college savings account for him when he was born. The account earns 2.5% interest compounded annually. If you know the account's value after 15 years is A, which expression tells you the account's value after 18 years?
3. 1.0254
1.0253 • A
0.0253 • A
3 • 0.025 + A
3•1.025 + A
0.025 + 3А

Answer 2

To find the account's value after 18 years, we can use the formula for compound interest:

A = P(1 + r/n)^(nt)

Where:
A = Final account value
P = Initial principal (the account's value after 15 years, given as A)
r = Annual interest rate (2.5% or 0.025)
n = Number of times interest is compounded per year (annually, so n = 1)
t = Number of years (18 - 15 = 3)

Substituting the given values into the formula, the expression that tells you the account's value after 18 years is:

A(1 + 0.025/1)^(1*3)

Answer 3

To find the account's value after 18 years, we can use the formula for compound interest:

A = P(1 + r/n)^(nt)

Where:
A = Final account value
P = Initial principal (the account's value after 15 years, given as A)
r = Annual interest rate (2.5% or 0.025)
n = Number of times interest is compounded per year (annually, so n = 1)
t = Number of years (18 - 15 = 3)

Substituting the given values into the formula, the expression that tells you the account's value after 18 years is:

A(1 + 0.025/1)^(1*3)

Simplifying this expression gives:

A(1.025)^3

So, the correct expression is 1.025^3 • A