If Bob and Judy combine their savings of $1,260 and $975, respectively, and deposit this amount into an account that pays 2% annual interest, compounded monthly, what will the account balance be after 4 years?

The account balance after 4 years will be $2,420.

Explanation:

First we need to add Bob and Judy's amount to find the total amount that will be deposited. (1260+975) = 2,235.

Now we will break up the annual interest into monthly interest because it will be compounded monthly. 2/12=0.166.

Then we will break up the 4 years into months also because the interest is compounded monthly. 4*12=48

Now we use the formula for compound interest

Final amount = Principal * (1+R) ^N

Principal = 2,235

R = 0.166% or 0.00166

N = 48

We put these values into our formula

2,235 * (1+0.00166) ^48

=2,420