Question

Suppose you have $100 in a savings account earning 2 percent interest a year. After five years, would you have more than $102, exactly $102 or less than $102?dsaxxxxxxxxxx0

Answer 1

You would have more than $102.

Earning 2% a year in interest would get you $2 in interest the very first year:

100(0.02) = 2

Adding this to the amount in the account, you would have 100+2 = 102 after the first year.