Question

Kevin wants to know how much money he will have in his account if he earns 5% interest compounded yearly for four years on a deposit of $2000?

Answer 1

Answer:

$2431.0125

Step-by-step explanation:

The Principle Amount that Kevin wants to deposit = $2000

Rate of interest offered = 5%

Time = 4 years

1st Year:

Compound Interest (C.I) = PTR/100

                                       = (2000 * 1 * 5)/100

                                       = $100

Balance Amount in his Account = Principle Amount + Compound Interest

                                                  = $2000 + $100

                                                  = $2100

2nd Year:

Compound Interest (C.I) = PTR/100

                                       = (2100 * 1 * 5)/100

                                       = $105

Balance Amount in his Account = Principle Amount + Compound Interest

                                                  = $2100 + $105

                                                  = $2205

3rd Year:

Compound Interest (C.I) = PTR/100

                                       = (2205 * 1 * 5)/100

                                       = $110.25

Balance Amount in his Account = Principle Amount + Compound Interest

                                                  = $2205 + $110.25

                                                  = $2315.25

4th Year:

Compound Interest (C.I) = PTR/100

                                       = (2315.25 * 1 * 5)/100

                                       = $115.7625

Balance Amount in his Account = Principle Amount + Compound Interest

                                                  = $2315.25 + $115.7625

                                                  = $2431.0125

So, the money that Kevin will have in his account if he earns 5% interest compounded yearly for four years on a deposit of $2000 = $2431.0125