Question

Maya deposited $817 in a savings account earning 2% interest, compounded annually.To the nearest cent, how much will she have in 2 years?

Answer 1

We have the next formula

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

A is the amount

P is the principal

r is the rate

t is the time

n is number of periods

In our case

P=817

r=2%

t=2 years

n=1

We substitute the values

`A=817(1+(0.02)/(1))^(1(2))=$850.01$`

Amount: $850.01

Interest: $33.01