Question

$2,000 was borrowed for 4 years with an interest rate of 3% compounded annually. What is the total amount owed at the end of 4 years?

Question 2 options:

$2,251.02


$2,240.00


$251.02


$240.00

Answer 1

251.02

let me know I am wrong

Answer 2

$2260

Explanation:

According to the formula for calculating amount in compound interest,

Amount = P(1+r/100)^n

Where P is the principal = $2000

r is the rate in % = 3%

n is the amount in years = 4years

Substituting the values into the formula of amount we have;

A = 2000(1+3/100)^4

A = 2000(103/100)^4

A = 2000{(1.03)^4

A = 2000× 1.13

A= 2000×1.13

A = $2260

Thee total amount at the end of four years will be $2260