Question

Given P equals $11260, T equals six years, and R equals 7.5% compounded weekly. Use the correct compound interest formula to calculate to the nearest cent the value of A.

Answer 1

We would apply the formula for determining compound interest which is expressed as

A = P(1 + r/n)^nt

where

A = total amount in the account at the end of t years

r represents the interest rate

n represents the periodic interval at which it was compounded

p represents the principal or initial amount deposited

From the information given,

P = 11260

t = 6

r = 7.5/100 = 0.075

n = 52(Assuming the number of weeks in a year is 52 and it would be compounded 52 times in a year)

Thus, we have

A = 11260(1 + 0.075/52)^52*6

A = 11260(1 + 0.075/52)^312

A = 17653.5