It is always spelled with a 'b'.
In Spanish, 'b' and 'v' are sometimes pronounced more like an English 'b' (e.g. boleto, viernes), especially at the beginning of words. In other cases, they are pronounced more like a sound between an English 'b' and an English 'v' (e.g. jueves, escribes).
I was not paying close enough attention and put "en el bano" instead of "en el banco," but instead of counting it wrong, it said it was correct... I would like to learn Spanish through Duolingo, but now every time I go to answer a question I am going to wonder if what I am entering is actually correct or not.