$2500 is invested at compound interest of 10% per year. What is the amount after 2 years?

Answer and explanation

Correct answer: B. $3025

  1. Step 1: Each year the amount is multiplied by 1.1.
  2. Step 2: After 2 years: 2500 x 1.1^2 = 3025.
Answer
$3025.

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