Question

You deposit $2000 each year into an account earning 5% interest compounded annually. How much will you have in the account in 30 years?

Answer 1

Answer:

3000

Step-by-step explanation:

Answer 2

I have $8,880.43  in the account in 30 years.

What is compound interest?

Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on principal plus interest.

Given

Let A be the final amount.

Principal = $2000

r = rate = 5%

n = number of compounding in a year = 4

t = number of years the principal will be compounded = 30

The formula for compound interest:

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

A = $2000(1+\frac{0.05}{4} )^{4\times30}$

A = $2000(1+0.0125 )^{120}$

$A=2000\times4.440$

A = $8,880.43

I have $8,880.43  in the account in 30 years.

Find out more information about compound interest here

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