SOLUTION: You have 3,000 in a savings account that pays 5 1/2% compounded annually. How much interest will you earn in two years If you don't take earned interest out of the account

Question 670054: You have 3,000 in a savings account that pays 5 1/2% compounded annually. How much interest will you earn in two years If you don't take earned interest out of the account
Answer by Alan3354(69443) (Show Source): You can put this solution on YOUR website!
You have 3,000 in a savings account that pays 5 1/2% compounded annually. How much interest will you earn in two years If you don't take earned interest out of the account
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1st year the interest = 3000*0.055 = $165
--> $3165 in the account
2nd year, 3165*0.055 = $174.075
--> $174.07 interest (banks always round down when paying)
--> $3339.07 in the account
$339.07 interest
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P = 3000*(1.055)^2 = $3339.075
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