Question

If £2000 is placed into a bank account that pays 3% compound interest per year,

how much will be in the account after 2 years?
8

Answer 1

£2,121.80

Explanation:

To solve this problem, we can use the compound interest formula:

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

P = initial balance

r = interest rate (decimal)

n = number of times compounded annually

t = time

First, change 3% into a decimal:

3% ->
`(3)/(100)` -> 0.03

Now, plug in the values:

`A=2,000(1+(0.03)/(1))^(1(2))`

`A=2,121.80`

Your answer is £2,121.80