16Hit1600
Advanced MathVery hardBalance after two years of 5% interest

Advanced Math practice question

An account with $600 earns 5% interest each year, compounded annually. What is the balance, in dollars, after 2 years?

Answer: 661.5 or 661.50

600 × 1.05² = 661.50.

Common wrong answers

If you answered 630
630 is after one year.
If you answered 660
660 adds $30 twice, ignoring compounding.
If you answered 694.58
694.58 is after three years.

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