Elijah opened a savings account and deposited 500.00 as principal. The account earns 2% interest, compounded annually. What is the balance after 5 years?

Solution

Solution

Amount : 552.04

Solution steps

Translate the problem into an equation:

A = 500 (1 + \frac{0.02}{1})^{1 \cdot 5}

500 (1 + \frac{0.02}{1})^{1 \cdot 5} = 552.04040 \dots

Round to the nearest hundredth:

552.04

Amount : 552.04

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