Jin Li's parents deposit $2,000 in a college savings account. The account pays an interest of 4% compounded annually. What would the total (new principal) be at the end of year 9?
This can be described by the exponential equation y = 2000 x 1.04(to the xth power), in which x is the number of years passed. thus, we put in 9 for x. y = 2000 x 1.04^9 1.04^9 = about 1.42 2000 x 1.42 = $2840 :)
