alleryStart learning →If 1,000 earns 5% interest per year with compounding, what is it worth after 2 years?
A1,102.50
B1,102
C1,105
D1,100
Answer & Solution
Correct answer: A. 1,102.50
1000 x 1.05 x 1.05 = 1,102.50 because year two interest is charged on 1,050.
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