A bank offers a savings account with an annual interest rate of 5%, compounded annually. If you deposit $2000, calculate the amount in the account after 4 years.

Sun, 19 Apr 2026 00:28:11 +0000

**Why Savers Across the U.S. Are Taking Notice: A 5% Annual Interest Savings Account Explained** In today’s economy, where savings often yield minimal returns, a bank offering 5% annual interest, compounded yearly, has sparked noticeable attention. If you invest $2,000 today, understanding how that grows over time isn’t just a math exercise—it’s a practical tool for planning long-term financial health. With rising costs and shifting spending habits, many are re-evaluating how even small deposits can grow securely through time-based interest. This savings account stands out because compound interest works quietly but powerfully: each year, interest is calculated not just on the original deposit, but on all accumulated earnings. Set at 5% and compounded annually, this structure ensures steady growth that outpaces simple interest. For savers seeking stability and transparency, the math behind this offer is both predictable and encouraging—especially when viewed over a four-year horizon. **A Closer Look at the 5% Annual Rate and Compounding Effect**