3. If the banks returned all the money plus interest accumulated from 1938 to 1998 it could be calculated using A=A0 (1.05)^t where A is the amount of money to be returned A0 was the initial amount and t is the number of years since 1938. (Notice that this formula assumes a very modest interest of 5percent per year) for the purposes of this example, let's assume the initial amount deposited A0 was $5000.00

Question

3. If the banks returned all the money plus interest accumulated from 1938 to 1998 it could be calculated using A=A0 (1.05)^t where A is the amount of money to be returned A0 was the initial amount and t is the number of years since 1938. (Notice that this formula assumes a very modest interest of 5percent per year) for the purposes of this example, let's assume the initial amount deposited A0 was $5000.00 
A. How much money would be in the account in 1998? 
B. What year would there be $25000.00 in the account? 
C. If the initial amount invested was doubled, how much money is there in 1998?

Steve · Answer

A. 1998 is 60 years after 1938. So plug in t=60 B. solve for t in 1.05^t = 50 C. double A0 and the later amounts also double.