Liam puts 2,000 dollars in the bank with a 3% annual interest rate compounded annually if loan does not touch his money how much money will he have after 2 years
The formula for calculating compound interest is:
A = P(1 + r/n)^(nt)
Where:
- A is the final amount of money
- P is the principal amount (initial amount of money)
- r is the annual interest rate (expressed as a decimal)
- n is the number of times that interest is compounded per year
- t is the number of years
In this case:
- P is $2,000
- r is 3% or 0.03
- n is 1 (compounded annually)
- t is 2 years
Plugging in these values into the formula:
A = 2000(1 + 0.03/1)^(1*2)
A = 2000(1 + 0.03)^2
A = 2000(1.03)^2
A = 2000(1.0609)
A ≈ $2,121.80
So, Liam will have approximately $2,121.80 after 2 years if he does not touch his money.