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26 August, 19:13

A principal of $2000 is placed in a savings account at 3% per annum compounded annually. How much is in the account after one year, two years and three years?

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  1. 26 August, 19:41
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    Step-by-step explanation:

    After one year

    A=p (1+r/n) ^nt

    =2000 (1+0.03/12) ^12*1

    =2000 (1+0.0025) ^12

    =2000 (1.0025) ^12

    =2000 (1.0304)

    =$2060.8

    After two-years

    A=p (1+r/n) ^nt

    =2060.8 (1+0.03/12) ^12*2

    =2060.8 (1+0.0025) ^24

    =2060.8 (1.0025) ^24

    =2060.8 (1.0618)

    =$2188.157

    After three years

    A=p (1+r/n) ^nt

    =2188.157 (1+0.03/12) ^12*3

    =2188.157 (1+0.0025) ^36

    =2188.157 (1.0025) ^36

    =2188.157 (1.0941)

    =$2394.063
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