Alec opened a savings account and deposited 100.00 as principal. The account earns 12% interest, compounded annually. What is the balance after 5 years?

Solution

Solution

Amount : 176.23

Solution steps

Translate the problem into an equation:

A = 100 (1 + \frac{0.12}{1})^{1 \cdot 5}

100 (1 + \frac{0.12}{1})^{1 \cdot 5} = 176.23416 \dots

Round to the nearest hundredth:

176.23

Amount : 176.23

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