Question

You put $500 in an account that earns 4% annual interest. The interest earned each year is added to the principal to create a new principal. Find the total amount in your account after each year for 3 years. 30 points

Answer 1

1st year= 520

2nd year = 540.8

3rd year= 562.43

Explanation:

500x0.04=20

the first year interest = 20

and total = 500 +20=520

520x0.04=20.8

the interst for second year= 20.8

and total 520+20.8=540.8

540.8x0.04= 21.63

the interst for the third year= 21.63

and total= 540.8+21.63=562.43