Question on Compound Interest.
The formula below can be used to calculate the compound interest;
[tex]\begin{gathered} A\text{ = p(1+}\frac{r}{100})^n \\ \text{Where A = amount,(\$) (that is, the money that will be in the account)} \\ r=\text{interest rate per annum, (\%)} \\ P=Pr\text{incipal, (\$), ( that is, the money invested)} \\ n=\text{ number of periods, years, } \end{gathered}[/tex]Where A= ? , P =$2000, r =2.5% and n = 10 years
Substituting these values into the formula above, we get
Note that: Amount = Principal + Interest, though not needed in this question.
[tex]\begin{gathered} A=P(1+\frac{r}{100})^n_{} \\ \\ A=2000(1+\frac{2.5}{100})^{10} \\ \\ A=2000(1+0.025)^{10} \\ A=2000(1.025)^{10}\text{ }=\text{ 2560.169 }\approx\text{ \$2560.17} \end{gathered}[/tex]Thus, the correct answer is $2560.17
