Question

ryan puts $500 into a bank account. the bank pays 5% compound interest per year. how much is the interest after one year?

Answer 1

Continuous compounding.

\( \color{Black}{\Rightarrow 500(1 + 0.05) \large^n }\)

Answer 2

\(n\textbf{ is the number of years.}\)

Answer 3

ok

Answer 4

\( \color{Black}{\Rightarrow 500(1.05)^1 }\)

\( \color{Black}{\Rightarrow 500 \times 1.05 }\)

Answer 5

$525?

Answer 6

is it?

Answer 7

This is compounded interest.

Answer 8

im confused :s

Answer 9

And yes it is $525 :)

Answer 10

oh ok there's part 2

Answer 11

lol sorry parth read mistake ;)

Answer 12

Interest = Amount - Principal
Interest = 525 - 500
Interest = 25

Answer 13

work out the total amount he has in his bank account after 2 yrs

Answer 14

@ZhangYan if it's one year then both simple and compound may apply :) so your answer is correct but not the method :S

Answer 15

work out the total amount he has in his bank account after 2 yrs