Answer:
[tex]A(x) = 12000(1.04)^x[/tex]
Step-by-step explanation:
Compound interest:
The compound interest formula is given by:
[tex]A(t) = P(1 + \frac{r}{n})^{nt}[/tex]
Where A(t) is the amount of money after t years, P is the principal(the initial sum of money), r is the interest rate(as a decimal value), n is the number of times that interest is compounded per year and t is the time in years for which the money is invested or borrowed.
$12000 cash
This means that [tex]P = 12000[/tex]
Compounded at 4% interest annually.
This means that [tex]r = 0.04, n = 1[/tex]
What equation will calculate the value in x years?
[tex]A(t) = P(1 + \frac{r}{n})^{nt}[/tex]
[tex]A(x) = P(1 + \frac{r}{n})^{nx}[/tex]
[tex]A(x) = 12000(1 + 0.04)^x[/tex]
[tex]A(x) = 12000(1.04)^x[/tex]
