A bank has an account for investors. Interest is added to the account at the end of each year at a fixed rate of 5% of the amount in th account at the beginnning of that year. A man deciddes to invest $x at the beginning of one year and then a further $x at the beginning of the second and each subsequent year, he also decides that he will not draw any money out of the account, but just leave it and any interest to build up. Show that, at the end of n years, when the interest for the last year has been added, he will have a total of $ 21(1.05^n - 1)x in his account.
Hi,
Try to build a table (with two columns: Start of year, End of year) to obtain the result. Thanks.
Cheers,
Wen Shih