To calculate the amount of money Liam will have after two years with a 3% annual interest rate compounded annually, we need to use the compound interest formula:
A = P(1 + r/n)^(nt)
Where:
A = the final amount of money
P = the principal amount (the initial amount of money)
r = the annual interest rate (as a decimal)
n = the number of times interest is compounded per year
t = the number of years
Given:
P = $2,000
r = 0.03 (3% expressed as a decimal)
n = 1 (interest is compounded annually)
t = 2
Now we can substitute these values into the formula and solve for A:
A = 2000(1 + 0.03/1)^(1*2)
A = 2000(1 + 0.03)^2
A = 2000(1.03)^2
A = 2000(1.0609)
A ≈ $2,121.80
Therefore, Liam will have approximately $2,121.80 after two years.
The correct answer is D $2,121.80.
<< Liam puts $2,000 in the bank with a 3% annual interest rate compounded annually. If Liam does not touch his money, how much money will he have after two years
A $2.000.06
B $2,060.00
C $2,120.00
D $2,121.80
1 answer