Question

Andy has $100 in an account. The interest rate is 6% compounded annually.

To the nearest cent, how much will he have in 2 years?

Answer 1

[AI-generated answer — Bot GPT 3.5]

To calculate the amount Andy will have in 2 years with a 6% interest rate compounded annually, we can use the formula for compound interest:

A = P(1 + r)^n

Where:
A = amount after interest
P = principal amount (initial amount)
r = interest rate per compounding period
n = number of compounding periods

In this case, Andy's initial amount is $100, the interest rate is 6%, and he will compound once a year for 2 years.

A = 100(1 + 0.06)^2
A = 100(1.06)^2
A = 100(1.1236)
A ≈ $112.36

To the nearest cent, Andy will have $112.36 in 2 years.