Question

Suppose that $6500 is placed in an account that pays 12% interest compounded each year.

Answer 1

The amount after 1 year is $7280 and the amount after two year is $8153.

Given that $6500 is placed in an account that pays 12% interest compounded each year.

Compounding is the addition of interest to the principal of a loan or deposit, or in other words, interest on principal plus interest.

Compounded interest=12%

Principal amount=$6500

Time period = 1 year

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

where P is Principle amount, r is annual interest, n is number of times the interest compounded monthly, t is number of years

Here P=6500, r=12%, n=1, t=1

Substitute these values in the formula, we get

A=6500(1+(0.12/1))¹⁽¹⁾

A=6500(1+0.12)¹

A=6500×1.12

A=7280

Now we have to calculate for two years.

That is if n=2 , then

A=6500(1+(0.12/1))¹⁽²⁾

A=6500(1+0.12)

A=6500×1.2544

A=8153.6

Hence, the amount for one year and two year when $6500 is placed in an account that pays 12% interest compounded is $7280 and $8153.60.

Learn more about compound interest from here brainly.com/question/2455673

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