Final answer:
To calculate Adilla's investment value after 2 years with a compound interest of 2.6%, we use the formula A = P(1 + r/n)^(nt). Plugging in the values, the investment grows to approximately $1264.41 after 2 years.
Step-by-step explanation:
The student has been asked to calculate the value of an investment made by Adilla amounting to $1200 at a compound interest rate of 2.6% per year for 2 years. To solve this, we can use the formula for compound interest: A = P(1 + r/n)^(NT), where:
- A is the amount of money accumulated after n years, including interest.
- P is the principal amount (the initial sum of money).
- r is the annual interest rate (decimal).
- n is the number of times that interest is compounded per year.
- t is the time the money is invested for, in years.
Since the interest is compounded annually, n is 1. So we have:
A = 1200(1 + 0.026/1)^(1*2) = 1200(1 + 0.026)^2 = 1200(1.026)^2
Calculating the value:
A ≈ 1200(1.053676) = $1264.41
So, the value of Adilla's investment at the end of 2 years is approximately $1264.41.