Answer:
Example: Suppose you give $100 to a bank which pays you 10% compound interest at the end of every year. After one year you will have $100 + 10% = $110, and after two years you will have $110 + 10% = $121.
compound interest image
Problem:
If you deposit $4500 into an account paying 7% annual interest compounded semi anualy , how much money will be in the account after 9 years?
Result:
The amount is $8358.7 and the interest is $3858.7.
Explanation:
STEP 1: To find amount we use formula:
A = total amount
P = principal or amount of money deposited,
r = annual interest rate
n = number of times compounded per year
t = time in years
In this example we have
After plugging the given information we have
STEP 2: To find interest we use formula , since 8358.7 P = we have:
3858.7
Step-by-step explanation:
