Question

Help!! I’ll give you 2000 points!!

Answer 1

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

→  $A=P(1+\frac{r}{n})^{nt}$ , 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

→  $A=1700(1+\frac{0.0119}{4})^{4(2)}$

→ $A=1700(1.002975)^{8}$

→ $A=1740.883806$ 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

$I=A-P$

∵ P = 1700

∵ A = 1740.88

∴ $I=1740.88-1700$

∴ I = $40.88

(b) The interest earned on Mary's investment after 2 years is $40.88