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In this scenario, value of the money increases by 3% each year for 2 years. To illustrate this: 2000 x 1.03 x 1.03 I have multiplied it by 1.03 twice as the question is asking for the value of the account after 2 years. This can also be written as: 2000 x 1.03^2 = £2121.80 Hope it helps!
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