Question

Leroy deposited $8,000 in an account earning 5% interest compounded annually.
To the nearest cent, how much will he have in 2 years?
Use the formula B=p(1+r)t, where B is the balance (final amount), p is the principal (starting amount), r is the interest rate expressed as a decimal, and t is the time in years

Answer 1

B = 8000(1 + 0.05)^2 = 8000(1.05)^2 = 8000(1.1025) = 8820.00

He will have $8,820.00 after 2 years.