Question

Find the balance on a deposit of $818, earning 4% interest compounded annually for 2 years.

Answer 1

Answer:

$884.749

Step-by-step explanation:

Amount is expressed as $A = P(1+\frac{r}{n} )^{nt}$

A is the amount compounded after 2 years

P is the amount deposited (Principal)

r = rate (in %)

t = time taken (in years)

n = 1 year (since interest was compounded annually)

Given P = $818, r = 4%, t = 2 years

On substituting;

$A = 818(1+0.04)^{2} \\A = 818(1.04)^{2}\\A = 818(1.0816)\\A = 884.749$

Therefore, balance on the deposit of $818, earning 4% interest compounded annually for 2 years is $884.749