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? You'll have $2,431.01
The formula for annual compound interest, including principal sum, is:A = P (1 + r/n)^(nt)
Where:
A = the future value of the investment/loan, including interest
P = the principal investment amount (the initial deposit or loan amount)
r = the annual interest rate (decimal)
n = the number of times that interest is compounded per year
t = the number of years the money is invested or borrowed for
