Question

you invest $2000 into savings account that gets 5% interest compounded yearly. How much money will you have after 7 years?

Answer 1

$2814.20

Explanation:

The multiplier each year is 1.05, so after 7 years the principal invested will be multiplied by 1.05^7. (The exponent indicates repeated multiplication.)

After 7 years, the balance will be ...

$2000×1.05^7 ≈ $2814.20