Question

If ?20000 is placed into a bank account that pays 3% compound interest per year how much will be in the account after 2 years.

Answer 1

Answer: $21,218

Explanation:

`A = P\bigg(1 + (r)/(n)\bigg)^(nt)\\\\\circ \text{A is the Accrued Amount}\\\circ \text{P is the Principle (amount invested)}\\\circ \text{r is the interest rate (convert percent into a decimal)}\\\circ \text{n is the number of times per year that interest is earned}\circ \text{t is the time}\\\\\text{In the given problem:}\\A=unknown\\P=20,000\\r=3\%\ \rightarrow 0.03\\n = 1\\t = 2\\\\A = 20,000\bigg(1 + (0.03)/(1)\bigg)^((1)(2))\\\\A = 20,000(1+0.03)^2\\\\A = 20,000(1.03)^2`

`A=20,000(1.0609)\\\\A=21,218`