A savings account pays 2% interest compounded annually. If $1,200 is deposited initially and again at the first of each year, how much money will be in the account three years after the initial deposit?

Question

Mathematics

Kallie Medina

2 September, 16:25

A savings account pays 2% interest compounded annually. If $1,200 is deposited initially and again at the first of each year, how much money will be in the account three years after the initial deposit?

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Cannon Harding · Answer 1

End of third year = 1,200 * (1.02) ^3 = 1,273.45 plus

end of second year = 1,200 * (1.02) ^2 = 1,248.48 plus

end of first year = 1,200 * (1.02) = 1,224.00

Total = 3,745.93