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If $1500 is invested at a compound interest rate of 4% per annum, what will be t

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Question: If $1500 is invested at a compound interest rate of 4% per annum, what will be the total amount after 2 years?

Options:

  1. $1624.00
  2. $1560.00
  3. $1500.00
  4. $1584.00

Correct Answer: $1624.00

Solution: 

Total Amount = P(1 + r/n)^(nt) = 1500(1 + 0.04/1)^(1*2) = 1500(1.0816) = 1624.00

If $1500 is invested at a compound interest rate of 4% per annum, what will be t

Practice Questions

Q1
If $1500 is invested at a compound interest rate of 4% per annum, what will be the total amount after 2 years?
  1. $1624.00
  2. $1560.00
  3. $1500.00
  4. $1584.00

Questions & Step-by-Step Solutions

If $1500 is invested at a compound interest rate of 4% per annum, what will be the total amount after 2 years?
  • Compound Interest – The process of earning interest on both the initial principal and the accumulated interest from previous periods.
  • Formula Application – Understanding and correctly applying the compound interest formula: A = P(1 + r/n)^(nt).
  • Time Periods – Recognizing the importance of the time variable in the compound interest formula.
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