Question

On Olga's 16th birthday, her uncle invested $2,000 in an account that was locked into a 1.75% interest rate, compounded monthly. How much will Olga have in the account when she turns 18? Round to the nearest cent.

Answer 1

Answer:

$2070.6

Step-by-step explanation:

Step one:

given data

principal p= $2000

Rate r= 1.75% = 0.0175

time t= 18-16= 2years

Required

The final amount of the compounded principal

The compound interest formula is

A=P(1+r)^t

A=2000(1+0.0175)^2

A=2000(1.0175)^2

A=2000*1.0353

A=2070.6

The account when she turns 18 will be $2070.6