Question

Brad puts $100.00 into an account to use for school expenses. The account earns 2% interest, compounded annually. How much will be in the account after 7 years?
Use the formula A=P1+
r
n
nt, where A is the balance (final amount), P is the principal (starting amount), r is the interest rate expressed as a decimal, n is the number of times per year that the interest is compounded, and t is the time in years.
Round your answer to the nearest cent

Answer 1

Use A = P(1 + r/n)^{nt} with P = 100, r = 0.02, n = 1, t = 7:

A = 100(1 + 0.02/1)^{1·7} = 100(1.02)^7 ≈ 100(1.14868566765) = 114.8685667649.

Rounded to the nearest cent: $114.87.