Question

A principal of $2000 is placed in a savings account at 3% per annum compounded annually. How much is in the account after one year, two years and three years?

Answer 1

Answer:

Step-by-step explanation:

After one year

A=p(1+r/n)^nt

=2000(1+0.03/12)^12*1

=2000(1+0.0025)^12

=2000(1.0025)^12

=2000(1.0304)

=$2060.8

After two-years

A=p(1+r/n)^nt

=2060.8(1+0.03/12)^12*2

=2060.8(1+0.0025)^24

=2060.8(1.0025)^24

=2060.8(1.0618)

=$2188.157

After three years

A=p(1+r/n)^nt

=2188.157(1+0.03/12)^12*3

=2188.157(1+0.0025)^36

=2188.157(1.0025)^36

=2188.157(1.0941)

=$2394.063