Vincent invest P500 at 10% per annum compound interest. How much will katlo have at the end of 2 years

Answer 1

To calculate the amount Katlo will have at the end of 2 years, we can use the formula for compound interest:

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

Where:
A = the amount of money accumulated after n years, including interest
P = the principal amount (initial investment)
r = the annual interest rate (in decimal form)
n = the number of times that interest is compounded per year
t = the number of years the money is invested for

Given:
P = P500
r = 10% or 0.10
n = 1 (compounded annually)
t = 2 years

Plug the values into the formula:

A = P(1 + r/n)^(nt)
A = P(1 + 0.10/1)^(1*2)
A = P(1 + 0.10)^2
A = P(1.10)^2
A = P(1.21)
A = P605

Katlo will have P605 at the end of 2 years.