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You deposit $1000 in a bank account. The money earns 10% interest, compounded annually. After 2 years, what will your total amount be?

 Jan 20, 2022
 #1
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The total amount will be 1000 + 2*0.1*1000 = 1200 dollars.

 Jan 20, 2022
 #2
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A=P(1+r/n)^(n*t); this is the formula for calculating compound interest. This means the total amount is 1000*(1+(1/10)/1)^(1*2)=1000*(11/10)^2=1000*121/100=10*121=1210 dollars. So your total amount would be 1210 dollars.

ImDecentAtMath  Jan 20, 2022
 #3
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Guest had done simple interest, which is why they got it wrong.

ImDecentAtMath  Jan 20, 2022

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