Question

suppose that $17,000 is deposited for six years at 5% APR. Calculate the interest earned if interest is compounded quartly . Round your answer to the nearest cent

Answer 1

$\bf ~~~~~~ \textit{Compound Interest Earned Amount} \\\\ A=P\left(1+\frac{r}{n}\right)^{nt} \quad \begin{cases} A=\textit{accumulated amount}\\ P=\textit{original amount deposited}\to &\ 17000\\ r=rate\to 5\%\to \frac{5}{100}\to &0.05\\ n= \begin{array}{llll} \textit{times it compounds per year}\\ \textit{quarterly, thus four} \end{array}\to &4\\ t=years\to &6 \end{cases} \\\\\\ A=17000\left(1+\frac{0.05}{4}\right)^{4\cdot 6}\implies A=17000(1.0125)^{24}$

the earned interest will then be A - P, namely A - 17000.