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Suppose you put $500 in the bank and it will earn 4% interest compounded each year choose the answer that shows how much you have in the bank after one year two years and three years

User Raju Ahmed
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1 Answer

2 votes

Answer:

one year, you will have $520 in the bank, after two years you will have $540.80, and after three years you will have $561.63.

Explanation:

AI-generated answer

To calculate the amount of money you will have in the bank after one year, two years, and three years with a $500 deposit and 4% interest compounded annually, you can use the formula for compound interest:

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

Where:

A is the final amount of money in the bank

P is the initial deposit ($500)

r is the interest rate (4% or 0.04)

n is the number of times interest is compounded per year (1, since it is compounded annually)

t is the number of years

Let's calculate the amounts for each year:

After one year:

A = 500(1 + 0.04/1)^(1*1)

A = 500(1.04)

A = $520

After two years:

A = 500(1 + 0.04/1)^(1*2)

A = 500(1.04)^2

A = $540.80

After three years:

A = 500(1 + 0.04/1)^(1*3)

A = 500(1.04)^3

A = $561.63

Therefore, after one year, you will have $520 in the bank, after two years you will have $540.80, and after three years you will have $561.63. This is assuming you do not deposit or withdraw any additional money during this time.

User Jyo De Lys
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