Question

How much would Keith have in his account after three years if he started with $200 and earns 2 percent interest, compounding annually?

Answer 1

Compound interest means earning interest on the interest and principal balance from previous years!

After 1 year, $200 x 1.02 = $204

After 2 years, $204 x 1.02 = $208.08

After 3 years, $208.08 x 1.02 = $212.24

Answer 2

Answer:

The amount after 2 year will be $212.2416

Explanation:

We have given principle amount P = $200

Time period n = 3 years

Rate of interest r = 2 %

We have to find the amount after 2 years if the amount is compounded annually

We know that amount is given by

$A=P(1+\frac{r}{100})^n$

$A=200(1+\frac{2}{100})^3$

$A= 212.2416$

So the amount after 2 year will be $212.2416