Problema Solution
Jessica deposited $10 in a saving account earning 5% interest, compound annually. To the nearest cent, how much will she have in 2 years?
Answer provided by our tutors
P = $10 the principle
i = 5% or 0.05
t = 2 years
A = the future value
A = P(1 + i)^t
A = 10(1 + 0.05)^2
by solving we find
A = $11.025
A = $11.03 to the nearest cent
click here to see the step by step solution of the equation
In 2 years she will have $11.03 (to the nearest cent).