If you put $100 into a bank account that earns five percent interest per year, what is the formula you should use to determine the account's future value in one year?

Question

Quizplus · Accepted Answer

The formula for calculating the account's future value in one year with a five percent interest rate is to multiply the present value by (1 + 0.05), which is the same as adding 5 percent to the present value. Therefore, the correct formula is: Future value = [Present value × (1 + 0.05)].

If You Put $100 into a Bank Account That Earns