total amount = P (1 + i)t What is the total amount that First Consumer Bank will receive after lending Jane $7,000 for three years at an interest rate of 5 percent, compounded annually?
P= principal (initial deposit) ($7000) i= interest (5%) t= # of years (3)
Total amount = P (1 + i)^t T= $7000(1 + 5%)^3 T= 7000(1.05)^3 multiply exponents before regular multiplication T= 7000(1.157625) Total= $8,103.38 after 3 years
