Question

For the investment with interest compounded annually, find the final balance and the total interest earned.

$500 for 2 years at 8%

A.
final balance: $540
interest earned: $40

B.
final balance: $580
interest earned: $80

C.
final balance: $583.20
interest earned: $83.20

D.
final balance: $620
interest earned: $120

Answer 1

Hmm.. Substituting this formula, What u get ?
A(t) = P(1+(r/n))^(nt)
A(2) = 500(1+(0.08/1))^(1*2)
Well, How much u got , A(2)= ??

Answer 2

?

Answer 3

@eddiessocool hope the above Equation Helps..

How much you got , Calculate A(2)=??

Answer 4

A(2) = 500(1+(0.08/1))^(1*2)

... A(2) = How much ??

Answer 5

A(2) = 500(1.08)^2 WHATS THE ^

Answer 6

well.. accurately, it comes as

A(t) = P(1+(r/n))^(nt)
A(2) = 500(1+(0.08/1))^(1*2)
A(2) = 500(1.08)^2, which is Equal to
A(2) = $583.20

---( Solution)----
Total balance = $583.20
Total interest = $83.20

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