The balance that Cody earned after 20 years is 891.57. Using the compound interest formula, the required value is calculated.
The compound interest is calculated by
[tex]A = P(1 + \frac{r}{n} )^n^t[/tex]
Where,
A - Total amount (Future value)
P - Principal amount (Initial value)
r - The rate of interest
n - Number of times compounded per 't'
t - Total number of years the money is invested
It is given that,
P = 600
r = 2% = 0.02
t = 20 years
n = 1 (since the amount is compounded annually)
Then,
[tex]A=600(1+\frac{0.02}{1})^1^*^2^0[/tex]
= 600 (1 + 0.02)²⁰
= 600 (1.02)²⁰
= 891.57
Therefore, the balance after 20 years is 891.57.
Learn more about the compound interest here:
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