Question

Any help? I am stuck.Mark deposits $2,000 in a savings account with an interest rate of 1.75% compounded annually. If he doesn't add any money, how much money will he have in the account after THREE years?

Answer 1

In this case, we'll have to carry out several steps to find the solution.

Step 01:

Principal = $2000

rate = 1.75% = 0.0175

time = 3 years

Amount = ?

Step 02:

Compounded annually

A = P * (1 + r/n) ^ nt

n = 1

$A\text{ = 2000 }\cdot(1+0.0175/1)^{1\cdot3}$

A = 2000 * (1.0534)

A = 2106.85

The answer is:

Mark will have $2106.85 after 3 years.