Question

Carrie deposited $100 into a savings account that earns 2% interest compounded annually. Carrie makes no additional deposits and no withdrawals. How much money will be in the account after 2 years?

A) $104.04
B) $102.00
C) $104.00
D) $106.04

Answer 1

The amount of money in the account after 2 years will be $104.04.

Step-by-step explanation:

To calculate the amount of money in the account after 2 years, we can use the formula for compound interest: A = P(1 + r/n)^(nt), where A is the future amount, P is the principal amount, r is the annual interest rate, n is the number of times the interest is compounded per year, and t is the number of years. In this case, P = $100, r = 0.02, n = 1 (since the interest is compounded annually), and t = 2. Plugging these values into the formula, we get A = 100(1 + 0.02/1)^(1*2) = 100(1.02)2 = $104.04.