Question

If Connie deposits $100 into a savings account with a 3% annual interest rate and doesn't withdraw any of the money for 2 years, what will her balance be at the end of 2 years?

Answer 1

The final amount/ her balance after two years is $106.09

Explanation:

We are going to assume that the balance compounds every year

applying the compound interest formula we have

`A= P(1+r)^t`

where

A, final amount

P, Principal= $100

r, Rate= 3%= 0.03

T, time= 2years

substituting our values into the formula we have

`A= 100(1+0.03)^2\\A=100(1.03)^2\\A=100*1.0609\\A=106.09\\`

The final amount/ her balance after two years is $106.09