Question

Find the value of a $3,000 certificate in 2 years, if the interest rate is 10% compounded annually.

Answer 1

Answer:

600$

Step-by-step explanation:

3000×2×.10=600

the 10 percent needs to be changed to .10

Answer 2

The value of a $\ 3,000$ certificate in $2$ years, if the interest rate is $10\%$ compounded annually will be   $\ 3630$.

What is compound interest?

Compound interest is the addition of interest to the principal of a loan plus interest.

Amount$= Principal(1+\frac{Rate}{100} )^{Time}$

We have,

Principal   $=\ 3,000$

Rate $= 10 \%$

Time $=2$ years

So,  using above mentioned formula;

Amount$= Principal(1+\frac{Rate}{100} )^{Time}$

             $= 3000(1+\frac{10}{100} )^{2}$

             $=3000 \ * (\frac{11}{10}) ^{2}$

              $=\ 3630$

So, the amount after two year will be  $\ 3630$ , which we find out using above mentioned formula.

Hence, we can say that the value of a $\ 3,000$ certificate in $2$ years, if the interest rate is $10\%$ compounded annually will be   $\ 3630$.

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