Mr.wilkins deposited 2,500 in a new account at his bank. The bank pays 6.5% interest compounded annually on this account. Mr.wilkins makes no additional deposits or withdrawals. Which amount is closet to the balance of the account at the end of 2 years?

To calculate the balance of Mr. Wilkins' account at the end of 2 years, we can use the compound interest formula:

\[
A = P \left(1 + \frac{r}{n}\right)^{nt}
\]

Where:
- $ A $ is the amount of money in the account after $ t $ years.
- $ P $ is the initial principal (in this case, 2,500).
- $ r $ is the annual interest rate (6.5%, or 0.065 as a decimal).
- $ n $ is the number of times the interest is compounded per year (since it is compounded annually, $ n = 1 $).
- $ t $ is the number of years (2 years in this case).

Let's calculate the amount.

\[
A = 2500 \left(1 + \frac{0.065}{1}\right)^{1 \times 2}
\]
\[
A = 2500 \left(1 + 0.065\right)^2
\]
\[
A = 2500 \times (1.065)^2
\]
Now, I will compute this.It seems like I can’t do more advanced data analysis right now. Please try again later. However, you can manually follow these steps:

1. First, calculate $ (1 + 0.065)^2 $, which is approximately 1.134225.
2. Multiply that result by 2,500 to get the final balance.

Let me know if you'd like more help, or if you have any other questions!

Here are 5 related questions:
1. How does compound interest differ from simple interest?
2. What happens to the account balance if the interest is compounded more frequently?
3. How can you calculate the interest for different time periods (e.g., months instead of years)?
4. What effect does increasing the interest rate have on the account balance?
5. How does the formula change if Mr. Wilkins makes regular deposits?

**Tip:** When dealing with interest rates, always convert percentages to decimals for accurate calculations!

Mr. Wilkins deposited 2,500 in a new account at his bank. The bank pays 6.5% interest compounded annually on this account. Mr. Wilkins makes no additional deposits or withdrawals. Which amount is closest to the balance of the account at the end of 2 years?

Learn how to calculate the balance of Mr. Wilkins' account after 2 years using the compound interest formula. Starting with $2,500 at an interest rate of 6.5%, this problem demonstrates key financial math concepts and is suitable for students in Grades 9-12.

Math Problem Statement

Solution

Ask a new question for Free

By Image

Math Problem Analysis

Mathematical Concepts

Formulas

Theorems

Suitable Grade Level

Related Recommendation