Answer:
$1221.19
Explanation:
Formula for compound interest:
A= P(1+r/n)^n x t
A = final amount
P = initial principal balance
r = interest rate
n = number of times interest applied per time period
t = number of time periods elapsed
We know that Serena pays annually meaning yearly (12 months or 1 year)
So after substituting all the numbers in,
A= 1000(1+0.02/12)^(12x10)
We change the rate to 0.02 because we must divide 2% by 100%. And divide the rate by number of times applied per time (n).
DISCLAIMER:
I have not done compound interest questions in a long time but if you want to confirm my answer, go to a calculator site and just input the numbers on there.