Question

Ethan opens up a new savings account. The account has a 3.5% compound interest per annum. Ethan invests £2,000 into the account for 2 years. How much money did Ethan have in the account after 2 years?

Answer 1

$\bf ~~~~~~ \textit{Compound Interest Earned Amount} \\\\ A=P\left(1+\frac{r}{n}\right)^{nt} \quad \begin{cases} A=\textit{accumulated amount}\\ P=\textit{original amount deposited}\dotfill &2000\\ r=rate\to 3.5\%\to \frac{3.5}{100}\dotfill &0.035\\ n= \begin{array}{llll} \textit{times it compounds per year}\\ \textit{per annum, thus once} \end{array}\dotfill &1\\ t=years\dotfill &2 \end{cases} \\\\\\ A=2000\left(1+\frac{0.035}{1}\right)^{1\cdot 2}\implies A=2000(1.035)^2\implies A=2142.45$