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2 years ago

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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