The formula I = PRT is used to calculate the amount of simple Teresa earned. Solve this formula for T
1 answer:
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Answer:
(a) There is $1740.88 in Mary's account after 2 years
(b) The interest earned on Mary's investment after 2 years is $40.88
Step-by-step explanation:
Let us revise the rule of the compound interest
→ , where
- A is the future value of the investment/loan, including interest
- P is the principal investment amount
- r is the annual interest rate (decimal)
- n is the number of times that interest is compounded per unit t
- t is the time the money is invested or borrowed for
∵ She invested $1700
∴ P = 1700
∵ The rate is 1.19%
∴ r = 1.19/100 = 0.0119
∵ It is compounded quarterly
∴ n = 4
∵ She decided to invest her money for 2 years
∴ t = 2
Let us substitute these values in the rule above to find her new amount of money in her account
→
→
→ dollars
Round it to the nearest cent → means 2 decimal places
→ A = $1740.88
(a) There is $1740.88 in Mary's account after 2 years
The interest amount is the difference between the new amount and the initial amount
∵ P = 1700
∵ A = 1740.88
∴
∴ I = $40.88
(b) The interest earned on Mary's investment after 2 years is $40.88
Answer:
$14025.52
Step-by-step explanation:
The Total amount after a compound interest can be calculated using the formula:
where P is the amount of deposit, R is the rate of interest, n is the duration.
Hence by substituting the values, we get:
T = <u>$14025.52 (nearest cent)</u>