Nathan put $200 in a savings account for two years. The interest rate is 5% and will be compounded annually. How much money will he have at the end of the two years?

Nathan will have $220.5 at the end of the two years.

Step-by-step explanation:

We are given the following in the question:

P = $200

r = 5% = 0.05

t = 2 years

The compound interest is given by:

where A is the amount, p is the principal, r is the interest rate, t is the time in years and n is the nature of compound interest.

Putting values, we get,

For n = 1

Thus, Nathan will have $220.5 at the end of the two years.

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