Question 1012453: Please, help me with: Alexis put $400 in an account that earns 2% simple interest. At the end of the first year, the bank deposited the interest earned on the principal into her account. After that, the money in Alexis's account included both the principal and the interest, and the entire sum earned interest. How much will Alexis have in the account at the end of 2 years?
Answer by macston(5194)   (Show Source):
You can put this solution on YOUR website! At the end of Year 1, she had 100% principal + 2% interest,
or 102% of $400:
.
(1.02)($400)=$408
.
Take $408 as the new principal for Year 2. At the end of
the year, she has 102% of $408:
.
(1.02)($408)=$416.16
.
ANSWER: At the end of year two, her balance will be $416.16.
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