Question

You deposit $500 in a savings account that earns 2.5% interest compounded yearly what is the balance in the account after 20 years

Answer 1

the balance in the account after 20 years is $819

Explanation:

The computation of the balance in the account after 20 years is shown below:

As we know that

Future value = Present value × (1 + rate of interest)^number of years

= $500 × (1 + 2.5%)^20

= $500 × 1.025^20

= $819

Hence, the balance in the account after 20 years is $819