Question

Kevin wants to know how much money he will have in his account if he earns 5% interest compounded yearly for four years on a deposit of $2000?

Answer 1

`A = $2431.01`

Explanation:

To calculate the value of an amount of money invested with compound interest, use the formula:

`A = P(1 +R/100)^n" or " A = P(1+r)^n`

Where `R` = rate of interest as a percent.
and `r` = rate of interest as a decimal.

`A = 2000(1+0.05)^4`

`A = 2000(1.05)^4" "`you have to use a calculator here.

`A = $2431.01`