Final answer:
Using the compound interest formula, the future value of $2,000.00 at a 3% interest rate compounded annually over 5 years would be approximately $2,318.54.
Step-by-step explanation:
To calculate the future value of $2,000.00 in an account with a compound interest rate of 3% over 5 years, you can use the compound interest formula:
A = P (1 + r/n)^(nt)
Where:
- A = the amount of money accumulated after n years, including interest.
- P = the principal amount (the initial amount of money)
- r = the annual interest rate (decimal)
- n = the number of times that interest is compounded per year
- t = the time the money is invested for, in years
In this case, P is $2,000, r is 0.03 (3% as a decimal), n is 1 (since interest is compounded annually), and t is 5 years.
Let's apply the values into the formula:
A = 2000(1 + 0.03/1)^(1*5)
A = 2000(1 + 0.03)^5
A = 2000 (1.03)^5
A = 2000 * 1.15927
A ≈ $2,318.54
So, at the end of 5 years, the amount in the account would be approximately $2,318.54.