Question

Ms. Brooks put $1200 in a 3 retirement account that offers 8% interest compounded annually. Ms. Brooks makes no additional deposits or withdrawals. How much interest will Ms. Brooks have earned at the end of 2 years?​

Answer 1

Answer:

$1,408.21.

Step-by-step explanation:

Since it is compounded annually we could use the formula

A=Pe^rt

We know that the initial amount she deposits is $1200, as stated by the problem. That is our P.

e is well, the e in your calculator which is approximately: 2.7182818284590452353602874713527

r is the rate which is 8%, although you must convert this into a decimal, which would be 0.08 as your r.

Lastly, t is the time, so in this case, 2 years.

And then plug in the values.

A=1200(e)^(0.08)(2)

A=1200(e)^(0.16)

A=1200(1.173510870991810235018611086892)

A=1,408.2130451901722820223333042704

Now since it is a money problem we must put it in the correct format.

A=$1,408.21