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If £2000 is placed into a bank account that pays 3% compound interest per year,
how much will be in the account after 2 years?

Answer 1

£2,121.8

Explanation:

Given the following;

Principal P = £2000

Rate r = 3%

Time t = 2 years

n = 1 (time of compounding)

Using the compound interest formula;

A = P(1+r)^t

A = 2000(1+0.03)^2

A = 2000(1.03)^2

A = 2000(1.0609)

A = 2,121.8

hence the amount that will be in his account after 2 years is £2,121.8