Suppose that $3,000 is placed in an account that pays 8% interest compounded each year assume that no withdrawals are made from the account find the amount in the account at the end of 2 years

Answer 1

The formula for compound interest is

A = P(1 + r/n)^(nt)

where:
A = the amount of money accumulated after n years, including interest.
P = the principal amount (the initial amount of money)
r = annual interest rate (in decimal form, so 8% is represented as 0.08)
n = number of times that interest is compounded per year
t = the time the money is invested for in years.

Here, given P = $3000, r = 8% = 0.08, n = 1 (since compounded each year), and t = 2 years, we can substitute these values into the formula:

A = 3000(1 + 0.08/1)^(1*2)
A = 3000(1 + 0.08)^2
A = 3000(1.08)^2
A = 3000*1.1664
A = $3499.20

So, the amount in the account at the end of 2 years would be approximately $3499.20.