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Sagot :
Answer:
option (1) is a better 18th Birthday gift of child by Grandfather.
Step-by-step explanation:
Amount deposited in bank at time of birth by Grandfather is $100.
And there is no other deposits and withdrawals for 18 years.
So,
Principal amount =$100
Time = 18 years
Rate of interest of bank = 10.5%
Option 1:- An account That grows by 10.5% each year
we know that Bank give compound interest on the deposit amount
then Compound interest = C.I=P(1+r) with an exponent of t
C.I= 100(1 + 10.5 over 100)with an exponent of 18
C.I= 100*6.0328
C.I= $603.28
Option 2:- An account that grows by $20 each year
Here,
Amount credited in account for 18 years = $20
So, Total amount after completion of 18 years = 10+18*20
=460
Hope this helped <3
The child turns 18 years old, and the money in the account will be a birthday gift is a better 18th Birthday gift for a child by a Grandfather.
The amount deposited in the bank at the time of birth by Grandfather is $100.
And there is no other deposits and withdrawals for 18 years.
Principal amount =$100
Time = 18 years
Rate of interest of bank = 10.5%
Option 1:- An account That grows by 10.5% each year
We know that Bank give compound interest on the deposit amount
What is the formula for compound interest?
Compound interest = C.I=P(1+r) with an exponent of t
C.I= 100(1 + 10.5 over 100)with an exponent of 18
C.I= 100*6.0328
C.I= $603.28
An account that grows by $20 each year
The amount credited in the account for 18 years = $20
The total amount after completion of 18 years = 10+18*20
The total amount after completion of 18 years=460
To learn more about the compound interest visit:
https://brainly.com/question/24924853
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