What is the balance after one year on an investment of $20,000 earning 5.2% interest compounded annually? A. .052 B. 21,040 c. 2
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Answer:
Interest in 3 years = $456.52
Step-by-step explanation:
As we know the the formula of compound interest
Total amount =
Here n = number of times amount is compounded
r = rate of interest
t = period
Here A = $2500
r = 0.0575
n = 1 (compounded annually)
t = 3 years
Therefore amount after 3 years
P =2500(1.0575)³
= 2500×1.18
= $2956.52
We have to calculate the interest then
Interest = $2956.52-$2500 = $456.52
So after 3 years interest gained = $456.52