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Pablo deposited $600 in an account earning 2% interest compounded annually. To the nearest cent, how much interest will he earn in 3 years?

Sagot :

samuelonum1

The total amount accrued, principal plus interest, with compound interest on a principal of $600.00 at a rate of 2% per year compounded 1 times per year over 3 years is $636.72.

Compound Interest

Given Data

  • Principal P = $600
  • Rate r = 2%
  • Time t = 3 years

First, convert R as a percent to r as a decimal

r = R/100

r = 2/100

r = 0.02 rate per year,

Then solve the equation for A

A = P(1 + r/n)nt

A = 600.00(1 + 0.02/1)(1)(3)

A = 600.00(1 + 0.02)(3)

A = $636.72

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