Question

Find the balance in the account.

$2,400 principal earning 2%, compounded annually, after 7 years

$307,200.00
$2,736.00
$2,756.85
$17,136.00

Answer 1

This can be solved using the formula for interest, which is the following:

Let:
F = Future value
P = Principal value
i = interest rate
n = interest period (n = 7)

F = P(1 + i)^n

Using the given values:

F = 2400(1 + 0.02)^7
F = 2756.8456

Therefore, the balance in the account would be $2756.85