Question

Determine the amount of interest the principal in each account had earned. (From Example 2)

Answer 1

The amount of interest that the principal in each account had earned is as follows:

Raul Avila = $167.12

Samuel Griffin = $364.91

How is compound interest computed?

The compound interest can be calculated using the compound interest formula:

A = P(1 + \frac{r}{n})^{nt}

A = final amount

P = initial principal balance

r = interest rate

n = number of times interest applied per time period

t = number of time periods elapsed

It can also be computed using an online finance calculator as follows:

Data and Calculations:

Raul Avila:

N (# of periods) = 110 days

I/Y (Interest per year) = 5.5%

PV (Present Value) = $10,000

PMT (Periodic Payment) = $0

Results:

FV = $10,167.12

Total Interest = $167.12

Samuel Griffin:

N (# of periods) = 120 days

I/Y (Interest per year) = 5.5%

PV (Present Value) = $20,000

PMT (Periodic Payment) = $0

Results:

FV = $20,364.91

Total Interest = $364.91

Thus, using the online finance calculator, the compound interests for each principal have been computed as $167.12 and $364.91, respectively.

Learn more about compound interests at brainly.com/question/19950566

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