Question

Suppose Ravi places $8500 in an account that pays 2% interest compounded each year.

Assume that no withdrawals are made from the account.

How much does he make after 1 year

How much after 2

Answer 1

1 years: $8670
2 years:$8840

Answer 2

This can be written as an expression, where x is the number of years.

8500(1.02)^x

Now, we plug in 1 and 2.

1 year = $8670

2 years = $8843.40