Problema Solution
Sara opens a bank account with $200. The account accrues 2% interest compounded annually.
How much money, to the nearest cent, will she have in her account at the end of 3 years? (Use the formula A=P(1+rn)nt, where P= initial amount of money, r = interest rate, t = the number of years, and n = number of times the interest is compounded per year.)
Answer provided by our tutors
P = $200 principal amount (the initial amount)
r = 0.02 annual rate of interest (as a decimal)
t = 3 years number of years the amount is deposited
n = 1 number of times the interest is compounded per year (interest compounded annually)
A = amount of money accumulated after n years, including interest
A = P(1 + r/n)^(nt)
A = 200(1 + 0.02/1)^(1*3)
A = $212.24
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After 3 years Sara will have $212.24 in her account.