Question

You deposited $2000 in an account that pays 8% interest compounded yearly. Find the balance of the account after 3 years.

Answer 1

Answer:

$2,519.42

Step-by-step explanation:

To solve this problem, lets use the compound interest formula:

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

P = initial balance

r = interest rate (decimal)

n = number of times compounded annually

t = time

First, lets change 8% into a decimal:

8% -> $\frac{8}{100}$ -> 0.08

Now lets plug the values into the equation:

$A=2,000(1+\frac{0.08}{1})^{1(3)}$

$A=2,519.42$

Your answer is $2,519.42