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Mr Wilkinson invests $3000 at a compound interest rate of 2.2% per annum. What will be the total amount after 3 years?

User Gooid
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1 Answer

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Final answer:

The total amount after 3 years with compound interest will be $3,204.60.

Step-by-step explanation:

To calculate compound interest, we use the formula:

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

Where:

  • P is the principal amount ($3000)
  • r is the annual interest rate (2.2% or 0.022)
  • t is the number of years (3)
  • n is the number of times interest is compounded per year (usually once annually)

Substituting the values, we get:

A = 3000(1 + 0.022/1)^(1*3)

A = 3000(1.022)^3

A = 3000(1.0682)

A = $3,204.60

Therefore, the total amount after 3 years will be $3,204.60.

User Herku
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