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NISA [10]
2 years ago
15

Sam invests $800 at 6%/a compounded annually for 5 years. What is the total interest earned?

Mathematics
1 answer:
s2008m [1.1K]2 years ago
4 0
<h3>Answer:    270.58 dollars</h3>

======================================================

Work Shown:

  • A = account value after t years
  • P = principal or amount deposited = 800
  • r = interest rate in decimal form = 0.06
  • n = number of times we compound per year = 1
  • t = number of years = 5

So,

A = P*(1+r/n)^(n*t)

A = 800*(1+0.06/1)^(1*5)

A = 1070.58046208

A = 1070.58

After five years, the account will have $1,070.58 in it.

The amount of interest earned is A-P = 1070.58 - 800 = 270.58 dollars.

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