3% = 100 3 = 0 , 03 F i rs t ye a r : 2500 + 2500 ∗ 0 , 03 = 2500 + 75 = 2575 S eco n d ye a r : 2575 + 2575 ∗ 0 , 03 = 2575 + 77 , 25 = 2652 , 25 T hi r d ye a r : 2652 , 25 + 2652 , 25 ∗ 0 , 03 = 2652 , 25 + 79 , 5675 = 2731 , 8175 F o u r t h ye a r : 2731 , 8175 + 2731 , 8175 ∗ 0 , 03 = 2731 , 8175 + 81 , 954525 = 2813 , 772025 F i f t h ye a r : 2813 , 772025 + 2813 , 772025 ∗ 0 , 03 = 2813 , 772025 + 84 , 41316075 = 2898 , 18518575$
To find the amount in a savings account after 5 years with a principal of $2,500 and an annual interest rate of 3%, we use the formula A = P ( 1 + r ) t . After doing the calculations, the account would have approximately $2898.18 at the end of 5 years.
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