Question

You deposit $80 in an investment account that earns 4.8% annual interest compounded monthly.


Write a function that represents the balance y (in dollars) of the investment account after t years.

(2 points)
y=?


What is the balance of the account after 7 years?

$?

Answer 1

y = 80(1 + 0.048/12)^{12t} = 80(1.004)^{12t}.

After 7 years: y(7) = 80(1.004)^{84} ≈ $111.87.