Liam puts $2,000 in the bank with a 3% annual interest rate compounded annually. If Liam does not touch his money, how much money will he have after two years?
Responses
A $2,000.06$2,000.06
B $2,060.00$2,060.00
C $2,120.00$2,120.00
D $2,121.80
To find the value of Liam's money after two years, we can use the formula for compound interest:
A = P(1+r)^t
Where:
A = the final amount of money
P = the initial principal amount (in this case, $2,000)
r = the annual interest rate (in decimal form, 0.03)
t = the number of years (in this case, 2)
Plugging in the values, we get:
A = 2000(1+0.03)^2
A = 2000(1.03)^2
A = 2000(1.0609)
A = 2121.80
So, Liam will have $2,121.80 after two years.
Therefore, the correct answer is D, $2,121.80.