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

Answer 1

Answer: Compounded annually: Account Balance = Principal x (1 + interest rate (decimal))^number of years. With the given information this is: 2000 (1.03)^2 = 2,121.80. So you will earn 121.80 in interest after 2 years on your original 2000 deposit.