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word problem

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You deposit $1000 at 2% for 20 years, compounded annually. What's the future value? use this interest 0.02/365

  • word problem -

    If the interest is compounded annually, why would you divide .02 by 365 ?
    That would make it " compounded daily".

    According to your first sentence ....

    amount = 1000(1.02)^20 = $1485.95

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