Answer:
y = P • (1+r)^t
Balance after 2 years: $3307.5
Step-by-step explanation:
To answer this question, we will use standard equation that calculates bank interests:
A = P(1+(r/n))^(n•t)
It might seem complicated, but let's explain:
A - amount of money after the time period
P - principal amount, the amount of money you started with
r - interest rate, in decimal numbers
n - number of times interest is being calculated per year
t - number of years
Since here, interest is annual, n = 1, so our equation is:
A = P(1+r)^t
P = $3000
r = 5% = 0.05
t = 2 years
A = 3000(1+0.05)^2
A = 3000•(1.05)^2
A = $3307.5
