Question

Joe has $2500 in a savings account that earns 9% interest per year. How much amount in dollars will he have in 3 years?

Answer 1

First of all, we are looking for interest: 100% -2500$, and 1% - $25 (just remove two zeros) and now we are looking for 9% (25•9) - $225. That is, he receives $225 per year, and we need to find out how much he receives in three years, i.e. 225•3= $675$. And finally 2500$+675$=3175$ and answer 3175.

Answer 2

To calculate the amount of money Joe will have in 3 years, we can use the formula:

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

where:

A = the amount of money Joe will have in 3 years

P = the principal amount = $2500

r = the annual interest rate = 9% = 0.09 (expressed as a decimal)

n = the number of times the interest is compounded per year (assuming annual compounding, n = 1)

t = the number of years = 3

Plugging in these values, we get:

A = $2500(1 + 0.09/1)^(1*3)

= $2500(1.09)^3

= $2500(1.29503)

= $3237.58 (rounded to two decimal places)

Therefore, Joe will have $3237.58 in 3 years.