Question

Rosanne has $9,716 in a savings account. The interest rate is 4%, compounded annually.To the nearest cent, how much will she have in 2 years?

Answer 1

To answer this question, we will use the following formula for annually compounded interest:

$F=A(1+r)^t,$

where A is the initial amount, r is the interest rate in decimal form, and t is the time in years.

Substituting A=9716, r=0.04, and t=2, we get:

$F=9716(1+0.04)^2.$

Simplifying the above result, we get:

$F=9716(1.04)^2=10508.83$

dollars.

Answer: $10508.83