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If $1800 is invested at 2% interest compounded annually find the total amount in 3 years.

1 Answer

2 votes

Answer:

$1910.1744

Explanation:

To start we have to calculate how much the total will give us in one year, for this we divide the number by 100 and multiply it by 102, so we will get that 2% in one year

(1800 / 100) * (100 + 2) =

18 * 102

1836

Now we will repeat the procedure but instead of using the 1800 we will use the 1836 which will be what we will have when the first year ends.

(1836 / 100) * (100 + 2) =

18.36 * 102

1872.72

Finally we do the same with the new number

(1872.72 / 100) * (100 + 2) =

18.7272 * 102

1910.1744

So in conclusion putting $1800 at the end of the 3 years we will get $1910.1744

$1910.1744 - $1800 = $110.1744

that is the exact amount of the profit that we will obtain.

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