When frederick was born, his grandparents gave him a gift of 2000, which was invested at an interest rate of 5% per year, compounded yearly. how much money will frederick have when he collects the money at the age of 18? give your answer to the nearest hundredth of a dollar.

Frederick collects the an amount of $4813.24 at the age of 18 out of which $2000 was the beginning amount.

Step-by-step explanation:

We are given the following information in the question:

Amount = 2000

Interest rate = 5%

The money is compounded annually or yearly.

Time = 18 years

Compound interest =

where P is the principal amount, r is the interest rate, t is the time in years and n is the number of compounding in a year.

Since, the money is compounded yearly we put n = 1.

Putting all the values, we get,

Thus, Frederick collects the an amount of $4813.24 at the age of 18 out of which $2000 was the beginning amount.