Toby invested $4500 for 2 years in a savings account. He was paid 4% per annum compound interest. How much did Toby have in his savings account after 2 years?

1 Answer
Nityananda
Oct 21, 2017

$4847.20

Explanation:

Here principal (P) is $4500, period (t) is 2 years and rate of interest (r) is 4% compounded annually. We have to find out the total amount (A)i.e. principal+interest after 2 years.

We know #A = p(1+r/100)^t#

#A= 4500(1+4/100)^2#

#A= 4500*(26/25)^2#

#A = 4500*26/25*26/25#

#A = 4847.20#

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