Question

Write a compound interest function to model the following situation. Then, find the balance after the given number of years.

Answer 1

Answer:

Compound interest function, $A = P(1 + \frac{r}{n} )^{nt}$

The amount when compounded annually after 8 years is $$21200.21$

Step-by-step explanation:

Topic: Compound Interest

To model the situation, we'll make use of the compound interest formula. The formula is as follows:

$A = P(1 + \frac{r}{n} )^{nt}$ ---- This is the compound interest function

Where

r = Rate = 2.5% = 0.025

n = Period = Annually = 1

t = Time = 8 years

P = Principal Amount = $17,400

A = Amount ---- This is the function we want to model

By Substitution, we have

$A = 17,400(1 + \frac{0.025}{1} )^{1*8}$

$A = 17,400(1 + 0.025)^{8}$

$A = 17,400(1.025)^{8}$

$A = 17400 * 1.21840289751$

$A = 21200.2104167$

Hence, the amount when compounded annually after 8 years is $$21200.21$ (Approximated)

Answer 2

Y=17400(1+0.025)^8 is your equation and with that you get $21200.21