Question

Trudy deposited $8,307 in an account earning 1% interest compounded annually.
To the nearest cent, how much will she 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 = 8307(1 + 0.01)^2 = 8307(1.01)^2 = 8307(1.0201) = 8473.9707

To the nearest cent: $8,473.97