Question

Mr. Morris deposits $3,000 into a savings account that compounds annually by 16%. If 2 years

pass, how much money does Mr. Morris have in his savings account?

Answer 1

$4036.8

Explanation:

Given data

Principal= $3,000

Rate=16% = 0.16

Time= 2 years

The expression for the compound interest is

A=P(1+r)^t

substitute our data into the expression to solve for A

A=3000(1+0.16)^2

A=3000(1.16)^2

A=3000*1.3456

A=$4036.8

Hence the savings after 2 years is $4036.8