Question

Keri deposits $100 in an account every year on the same day. She makes

no other deposits or withdrawals. The account earns an annual rate of 4%

compounded annually. How much interest does it earn on the 2nd year?*

Answer 1

$20.32 or $12.16 depending on the question below!

Explanation:

$320.32

It's a bit ambiguous, the current Principal is $100 plus 2 $ additions of $100 or the current Principal is $0 plaus 2 years of $100 contributions. In this case it's $212.16