Question

How much interest would 2000 earn compounded annually in two years at the rate of 1.2

Answer 1

Here, we are required to determine how much interest 2000 would earn compounded annually in two years at the rate of 1.2.

The interest earned is I = 880

To calculate the final amount A',

• The system can be assessed in terms of simple interest annually.

• Fir the first year, A = P(rt)
• where, r = 1.2 and t = 1.

Therefore;

• A = 2000(1.2×1).
• A = 2400.

Therefore, during the second year, 2400 is the new Principal amount.

Therefore, A' = 2400 (1.2×1).

• A' = 2880.

Therefore, the amount due after 2 years is 2880.

However, since the starting principal is 2000,

• The interest is I = A' - P
• i.e I = 2880 - 2000

Interest is therefore, I = 880.

Read more:

brainly.com/question/18187284