Answer:
A. More than $102
Explanation:
Given the Principal amount, P = $100
interest rate, r was 2 percent per year= 2/100
n = 1 = the interest is calculated yearly
After time, t of 5 years, the Principal will have increase to?
using the formula for compound interest:
Compound interest for 5 years = P (1+ r/n)^nt
= $100 (1+ (0.02/1))^ (1*5)
= $100 (1.02)^5
= $100* 1.104 = $110.41
After time, t of 5 years, the Principal will have increase to $110.41 which is more than $102
