Question

which amount is closest to the balance of the account at the end of 2 years?

Answer 1

Using the compound interest formula;

$A=P(1+\frac{r}{n})^{nt}$

where p is the principal

r is the rate

t is the time

n is the number of time it is compounded

P = $2500

r = 0.065

n = 1

t = 2

substitute into the formula

$A=2500(1+\frac{0.065}{1})^{1\times2}$$undefined$