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

Terrence Nunez

Mathematics

12 June, 15:47

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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Sean · 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