Toby invested $4500 for 2 years in a savings account. He was paid 4% per annum compound interest. How much did Toby have in his savings account after 2 years?

Question

Toby invested $4500 for 2 years in a savings account. He was paid 4% per annum compound interest. How much did Toby have in his savings account after 2 years?

1 Answer

Impact of this question

5584 views around the world

You can reuse this answer
Creative Commons License

Answer 1 · 2017-10-21T13:50:33

$4847.20

Explanation:

Here principal (P) is $4500, period (t) is 2 years and rate of interest (r) is 4% compounded annually. We have to find out the total amount (A)i.e. principal+interest after 2 years.

We know $A = p {(1 + \frac{r}{100})}^{t}$ $A = p(1+r/100)^t$

$A = 4500 {(1 + \frac{4}{100})}^{2}$ $A= 4500(1+4/100)^2$

$A = 4500 \cdot {(\frac{26}{25})}^{2}$ $A= 4500*(26/25)^2$

$A = 4500 \cdot \frac{26}{25} \cdot \frac{26}{25}$ $A = 4500*26/25*26/25$

$A = 4847.20$ $A = 4847.20$

Science

Math

Humanities

... and beyond

Toby invested $4500 for 2 years in a savings account. He was paid 4% per annum compound interest. How much did Toby have in his savings account after 2 years?

1 Answer

Explanation:

Related questions

Impact of this question