Question

If the APY of a savings account is 2.6% and if the principal in the savings account was $2400 for an entire year, what will be the balance of the savings account after all the interest is paid for the year?

Answer 1

The answer is $2462.40

Answer 2

Answer:

$2462.40

Step-by-step explanation:

We have been given that the  APY of a savings account is 2.6% and the principal in the savings account was $2400 for an entire year.

To find the balance of the savings account after all the interest is paid for the year, we will use compound interest formula.

$A=P(1+\frac{r}{n})^{nT}$, where,  

A= Final amount after T years.

P= Principal amount.

r= Interest rate in decimal form.

n= Period of compounding.  

T= Time in years.

$2.6\text{ percent}=\frac{2.6}{100}=0.026$

Upon substituting our given values in above formula we will get,

$A=2400*(1+\frac{0.026}{1})^{1*1}$

$A=2400*(1+0.026)^{1}$

$A=2400*1.026$

$A= 2462.40$

Therefore, the balance of the savings account after all the interest is paid for the year will be $2462.40.