Compound interest formula
[tex]A=P(1+i)^n[/tex]where:
• A is the final amount including principal
,• P is the principal amount
,• i is the interest rate per year (as a decimal)
,• n is the number of years invested
Replacing with P = 38000, i = 0.02, and n = 3, we get:
[tex]A=38000(1+0.02)^3=40325.9[/tex]