Find the balance on a deposit of $818, earning 4% interest compounded annually for 2 years.

The balance on a deposit of $818, earning 4% interest compounded annually for 2 years is $884.749.and this can be determined by using the compound interest formula.

Given :

The balance on a deposit of $818, earning 4% interest compounded annually for 2 years.

The formula of compound interest can be used to determine the final balance. The formula of compound interest is given by:

     ---- (1)

where A is the final amount, P is the initial amount, n is the number of times interest applied,  and t is the number of time periods elapsed.

Now, substitute the value of known terms in equation (1).

A = $884.749

So, the balance on a deposit of $818, earning 4% interest compounded annually for 2 years is $884.749.

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Step-by-step explanation:

Amount is expressed as

A is the amount compounded after 2 years

P is the amount deposited (Principal)

r = rate (in %)

t = time taken (in years)

n = 1 year (since interest was compounded annually)

Given P = $818, r = 4%, t = 2 years

On substituting;

Therefore, balance on the deposit of $818, earning 4% interest compounded annually for 2 years is $884.749

5.6%

step-by-step explanation: