Question

Madeline invests $25,000 in an account that offers a compound interest rate of 9.5% per year. Which of the following is the correct equation for how much Madeline will have after 8 years?

Answer 1

Use this equation:   Amount after years=Initial investment*(1+Interest rate/time compounded yearly)^number of years*times compounded yearly

So A=25,000(1+.095/1)^8*1
Simplify
A=25000(1.095)^8
Simplify
A=25000(2.07)
Solve
A=$51,671.73

This equation can be used for all problems of this type.