on january 1,1997 you deposit $200.00 in a bank account paying 5% interest compunded annually on december 31 of each year. which of the following will be the account balance on january 1,2005

Answer 1

P = Po(1+r)^n.

Po = $200.00

r = (5%/100%) = 0.05 = Annual % rate
expressed as a decimal.

n = 1Comp/yr * 8yrs = 8 Compounding
periods.

Plug the above values into the given Eq and get:

P = $295.49.