Question

You deposit $500 in a savings account that earns 2.5% interest compounded yearly. Find the balance in the account after 1 year. Be sure your answer has a dollar sign. For example: $150.80 *

Answer 1

$512.5

Explanation:

Given data

P= $500

R=2.5%

T= 1 year

The compound interest formula is

A=P(1+r)^t

substitute

A=500(1+0.025)^1

A=500(1.025)

A=500*1.025

A=$512.5

Hence the balance is $512.5