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How much money will you have if you invest $2200 at 2%/a compounding annually for 30 years?

1 Answer

5 votes

Answer:

$3,985.00

Explanation:

The formula for the amount accrued, A if you invest an amount P at r% compounded annually for n years is given by the formula


A = P\left(1 + (r)/(100)\right)^n
A = P\left(1 + (2)/(100)\right)^(30) \\\\= P\left(1 + 0.02\right)^(30) \\\\= P\left(1 .02\right)^(30) \\\\= \; \$3,985.00

The division by 100 is necessary to allow r% to be reduced to a decimal

So using this formula directly by substituting values gives

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