Answer:
SI = prt / 100
SI = 100 x .02 x 3
SI = 6
Amount = 100 + 6 = 106
The total amount after 3 years at 2% interest is $106.12
Simple interest is a method to calculate the amount of interest charged on a sum at a given rate and for a given period of time.
Formula of Compound interest:
Amount = [tex]P(1+\frac{r}{100} )^{t}[/tex]
Where ,
P is principal or initial amount
r is rate of interest
t is time in years
According to the question
The value of a savings account (Principal)= $100
Time period = 3 years
Rate of interest = 2%
Now,
using the formula of Compound interest:
Amount = [tex]P(1+\frac{r}{100} )^{t}[/tex]
Putting the values in formula
Amount = [tex]100(1+\frac{2}{100} )^{3}[/tex]
Amount = [tex]100*\frac{51}{50} * \frac{51}{50} * \frac{51}{50}[/tex]
Amount = $106.12
Therefore ,
Total amount after 3 years = $106.12
Hence, the total amount after 3 years at 2% interest is $106.12 .
To know more about Compound interest here:
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