Question

You deposited $2000 in an account that pays 8% interest compounded yearly. Find the balance of the account after 3 years.

Answer 1

$2,519.42

Explanation:

To solve this problem, lets 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, lets change 8% into a decimal:

8% ->
`(8)/(100)` -> 0.08

Now lets plug the values into the equation:

`A=2,000(1+(0.08)/(1))^(1(3))`

`A=2,519.42`

Your answer is $2,519.42