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Suppose that $5000 is placed in an account that pays 2% interest compounded each year. Assume that no withdraws are made from the account. Follow instructions below do not do any roundingA- find the amount in the account at the end of one year B- find the amount in the account at the end of two years

Respuesta :

SOLUTION:

Given;

[tex]P=5000,r=2\text{ \%}=0.02[/tex]

(a) At the end of the first year;

[tex]\begin{gathered} A=P(1+\frac{r}{n})^{nt} \\ \\ A=5000(1+0.02)^1 \\ \\ A=5100 \end{gathered}[/tex]

ANSWER: $5,100

(b) At the end of two years;

[tex]\begin{gathered} A=5000(1+0.02)^2 \\ \\ A=5202 \end{gathered}[/tex]

ANSWER: $5,202

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