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You invest $2,000 in an account that is compounded annually at an interest rate of 5%. You never withdraw money from the account. How much money will be in the account after 4 years?

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toporc

The following formula for compound interest applies:
\(A=P(1+r)^{t}\)
where A is the amount after t years, P is the principal and r is the annual interest rate expressed as a decimal. Plugging the given values into the formula gives:
\(A=2000(1+0.05)^{4}\)
The amount after 4 years is therefore $2,431.01

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