Question

Solve the compound interest problem. ​$3425 is invested at ​%7.5 compounded monthly for years. a. Find the overall amount. b. Find the compound interest.

Answer 1

Complete question :

Solve the compound interest problem. ​$3425 is invested at ​%7.5 compounded monthly for 2 years. a. Find the overall amount. b. Find the compound interest.

Answer:

$3977.425 ; $552.425

Step-by-step explanation:

Given that:

Principal (P) = $3425

Rate (r) = 7.5% = 0.075

Time(t) = 2 years

A = p(1 + r/n)^nt

r = rate

n = number of times compounded per year

t = time in years

A = final amount

A = 3425(1 + 0.075/12)^12*2

A = 3425(1 + 0.00625)^24

A = 3425(1.00625)^24

A = 3425(1.1612920)

A = $3977.4251

Hence, overall amount = $3977.425

Compound interest = $(3977.425 - 3425) = $552.425