Lizbeth deposited $6200 into a savings account for which interest is compounded monthly at a rate of 2.37%.

How much interest will she earn after 8 years?

Question

Lizbeth deposited $6200 into a savings account for which interest is compounded monthly at a rate of 2.37%.

How much interest will she earn after 8 years?

paki · Answer

I=PRT/100 
I= 1140$

ranga · Answer

Here is the compound interest formula: $$\Large A = P(1 + \frac{ r }{ n })^{nt}$$A = Amount at maturity
P = Principal Amount
r = Annual interest rate in decimal
n = compounding period (compounded how many times a year)
t = years invested

Calculate A.  Subtract P to find the interest earned.

ranga · Answer

Here, P = 6200;  r = 0.0237;  n = 12;  t = 8.
Plug the numbers into the compound interest formula, calculate A.
Interest earned = A - P = A - 6200 = ?

anonymous · Answer

i got an answer that i know isnt right . 590175.52

ranga · Answer

Make proper use of parenthesis in your calculator.  Or to avoid complicated entry simplify each number first.

ranga · Answer

A = 6200(1 + 0.0237/12)^(12*8)
  = 6200(1.001975)^96 = ?

anonymous · Answer

after that the problem would look like 

6212.245^96  

right ?

ranga · Answer

Be careful when you are using the calculator.  Tell me what you are entering in each step.

ranga · Answer

Enter: 
1.001975 
x^y 
96 
= 
x
6200
=