Question

Anne invented 1000 in an account with a 1.3% annual interest rate she made no deposits or withdrawals on the account for 2 years if interest was compounded annually which equation represents the balance in the account after 2 years

Answer 1

Part a) The equation that represent the balance in the account after 2 years is equal to

`\$1,000(1+(0.013)/(1))^(1*2)`

Part b) The balance in the account after 2 years is equal to
`\$1,026.17`

Explanation:

we know that

The compound interest formula is equal to

`A=P(1+(r)/(n))^(nt)`

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest in decimal

t is Number of Time Periods

n is the number of times interest is compounded per year

in this problem we have

`t=2\ years\\ P=\$1,000\\ r=0.013\\n=1`

substitute in the formula above

`A=\$1,000(1+(0.013)/(1))^(1*2)` ----> equation that represent the balance in the account after 2 years

`A=\$1,000(1+(0.013)/(1))^(1*2)=\$1,026.17`