Question

eva invest $120 at a rate of 3% per year compound interest. calculate the total amount eva has after 2 years

Answer 1

Eva has $127.31 after 2 years.

Explanation:

Here is the formula for compound interest

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

Where
`A` is the final amount,
`P` is the initial amount,
`r` is the interest rate as a decimal,
`n` is the number of times the interest applied per time period, and
`t` is the number of time periods.

We are given

`P=120\\r=0.03\\n=1\\t=2`

Substitute our numbers into the equation

`A=120(1+(0.03)/(1))^(1*2)`

`A=120(1.03)^(2)`

`A=120*1.03^(2)`

`A=120*1.0609`

`A=127.308`