Explanation
For a sum compounded annually, the Annuity formula is given by:
[tex]\begin{gathered} A=P\times\frac{1-(1+r)^{-n}}{r} \\ \\ where\text{ P =Initial deposit =\$1000} \\ r=rate\text{ of interest=2 \% =0.02} \\ n=the\text{ number of years compounded =20} \end{gathered}[/tex]
Thus, we will compute the amount that will be in his account as:
[tex]A=1000\times\frac{1-(1+0.02)^{-20}}{0.02}[/tex][tex]\begin{gathered} A=1000\times\frac{0.3270}{0.02} \\ \\ A=16351.43 \end{gathered}[/tex]
Therefore, after 20 years, he will have had the sum of $16351.43 in his account
