Question

Vijay has $70 in a savings account. The interest rate is 2%, compounded annually.To the nearest cent, how much will he have in 3 years?

Answer 1

principal = $70

rate = 2%=2/100=0.02

time = 3 years

`A=p(1+(r)/(n))^(nt)`

Therefore,

`\begin{gathered} A=70(1+0.02)^3 \\ A=70(1+0.02)^9 \\ A=70(1.02)^3 \\ A=70*1.061208 \\ A=74.28456 \\ A=\text{ \$74}.28 \end{gathered}`