Question

What is the balance on a deposit of $1,150 that earns 9% interest compounded annually for 2 years

Answer 1

Step One: Calculate interest.

$1150*0.09=103.5$

Step Two: Calculate the amount at the end of the first year.

$1150+103.5=1253.5$

Step Three: Calculate the amount at the end of the second year. This will be your final answer.

$1253.5+103.5=1357$

$1357 balance