On the day Harry Potter was born, his parents deposited 78,000 galleons in the Gringotts Wizarding Bank. Assume that the bank promises a fixed interest rate of 3%. How much will Harry have in his account when he enters Hogwarts at age 12?

111,209.35 galleons

Explanation:

Data provided in the question:

Initial deposit i. e principle amount = 78,000 galleons

Interest rate = 3% = 0.03

Time period, n = 12 years

Now,

Using the compounding formula, we have

Future value = Initial deposit * [ 1 + Rate ]ⁿ

thus,

Future value = 78,000 * [ 1 + 0.03 ]¹²

or

Future value = 78,000 * 1.4258

or

Future value = 111,209.35 galleons