Question

Anne invented 1000 in an account with a 1.3% annual interest rate she made no deposits or withdrawals on the account for 2 years if interest was compounded annually which equation represents the balance in the account after 2 years

Answer 1

Answer:

Part a) The equation that represent the balance in the account after 2 years is equal to

$\ 1,000(1+\frac{0.013}{1})^{1*2}$

Part b) The balance in the account after 2 years is equal to $\ 1,026.17$

Step-by-step explanation:

we know that    

The compound interest formula is equal to  

$A=P(1+\frac{r}{n})^{nt}$  

where  

A is the Final Investment Value  

P is the Principal amount of money to be invested  

r is the rate of interest  in decimal

t is Number of Time Periods  

n is the number of times interest is compounded per year

in this problem we have  

$t=2\ years\\ P=\ 1,000\\ r=0.013\\n=1$  

substitute in the formula above  

$A=\ 1,000(1+\frac{0.013}{1})^{1*2}$   ----> equation that represent the balance in the account after 2 years

$A=\ 1,000(1+\frac{0.013}{1})^{1*2}=\ 1,026.17$