Patty opened a savings account and deposited 500.00 as principal. The account earns 4% interest, compounded annually. How much interest will she earn after 2 years?

Solution

Solution

Interest : 40.8

Solution steps

Translate the problem into an equation:

540.8 = 500 + I

Solve for

I, 540.8 = 500 + I : I = 40.8

Interest : 40.8

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