Question

to encourage you to save your parents open a savings account in your name. This savings account earns 3% interest every year. Suppose that your grandparents deposit $2,000 in the account on January 1. If you don't take any money out or put money in the account, how much money will be in the account at the end of year 4?

Answer 1

$2,240. (For simple interest).

Each year your deposit expands by 3% of the original amount, so 4 years earns 12%. 2000*112%= 2000 * 1.12 = 2240.