Question

given the principal in a bank at the beginning of the year and a rate of interest that is compounded annually, calculate the amount in the account at the end of the year. $2,000; 2.5% if interest is compounded annually, what is the amount after t = 1 year?

Answer 1

Answer:

The amount is $2050

Explanation:

Given the following:

Principal, P = $2,000

Rate, r = 2.5%

Time, t = 1 year

Number of times interest is compounded in a year, n = 1

The amount is given as:

$\begin{gathered} A=P(1+\frac{r}{n})^{nt} \\ \\ =2000(1+0.025)^{1\times1} \\ \\ =2000(1.025) \\ =2050 \end{gathered}$

The amount is $2050