must find the amount in the account after 1 and 2 years

Question

Suppose Eric places $2000

 in an account that pays 2%

 interest compounded each year.

Assume that no withdrawals are made from the account.

Answer 1

2,000 x .02 = $40

after one year account balance = $2,040.00

2,040 x .02 = $40.80

after two years account balance = $2,080.80

if compounded annually at 2%

2,000(1+.02)^n where n= number of years

2,000(1.02)^1 = 2,040

2,000(1.02)^2 = 2,000(1.0404) = 2080.8