Question

Ruth has $6,662 in a savings account. The interest rate is 3%, compounded annually.To the nearest cent, how much will she have in 2 years?

Answer 1

Given

Ruth has $6,662 in a savings account. The interest rate is 3%, compounded annually.

To find the amount she will have in 2 years to the nearest cent.

Now,

The Principal amount is given by, $6662.

The rate of interest r is 3%.

The time taken is 2 years.

Then, the amount she will have in her account is,

`\begin{gathered} A=P(1+(r)/(100))^t \\ A=6662(1+(3)/(100))^2 \\ A=6662(1+0.03)^2_{} \\ A=6662(1.03)^2 \\ A=7067.7158 \end{gathered}`

Since the digit after the decimal point is greater than 5.

The amount Ruth will have in her account is $7068.