Question

The principal represents an amount of money deposited in a savings account subject to

Answer 1

Step-by-step explanation:

So the general formula for compound interest is $A = P(1+\frac{r}{n})^{nt}$ where t is typically time in years, and n is how many times it's compounded per year. But in this case it's only compounded 1 time per year so the equation is just $A = P(1+r)^t$. in this case P is the principal amount, r is the interest, and A is the final amount. So the 5% interest rate becomes 0.05 by dividing by 100 to convert it into decimal form and the principle amount of 11,000. This gives you the formula $A = 11000(1.05)^t$. This is the answer to the first question where t is the time in years. When it says "Find interest earned" I'm a bit confused, is it giving you x amount of years where you have to calculate the interest earned or does it want a general equation? Because the general equation would be the final amount - the principle amount which calculates the difference. So the equation for interest earned would be $11000(1.05)^t-11000$. To calculate the amount of money after 5 years you simply plug in 5 as t. this gives you the equation $11000(1.05)^5 \approx 11000(1.276) \approx 14,039.10$