Question

jorge invests 2,500 in an online investment account that pays 6.75% interest compounded annually. Approximately how much money will he have in his account in 2 years

Answer 1

2,848.90

Explanation:

We are given the following;

• Amount invested (principal) = 2,500
• Rate of interest is 6.75% p.a
• Time is 2 years

We are required to determine the amount in his account after 2 years.

Since the money was compounded annually;

We are going to use the compound interest formula of getting amount accrued.

A = P(1 + r/100)^n

where n is the interest periods, in this case n=2

Therefore;

A = 2500 (1 + 0.0675)^2

=2,848.89

= 2,848.90

Thus, the amount that will be in the account is 2,848.90.