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

$1200 for 2 years at 10%

A.
final balance: $1440
interest earned: $240

B.
final balance: $1452
interest earned: $252

C.
final balance: $1600
interest earned: $400

D.
final balance: $2400
interest earned: $1200

Question

For the investment with interest compounded annually, find the final balance and the total interest earned. 

$1200 for 2 years at 10%
 
 A.
final balance: $1440 
interest earned: $240
 
 B.
final balance: $1452 
interest earned: $252
 
 C.
final balance: $1600 
interest earned: $400
 
 D.
final balance: $2400 
interest earned: $1200

anonymous · Answer

@texaschic101

mindblast3r · Answer

Compounded annually means it's compounded once a year?

acxbox22 · Answer

1200(1+0.1)^2
1200(1.1)^2
1452

acxbox22 · Answer

1452-1200=252
252=interest

mindblast3r · Answer

https://qrc.depaul.edu/StudyGuide2009/Notes/Savings%20Accounts/Compound%20Interest.htm

mindblast3r · Answer

What's the point of giving him the answer? Why not teach him how to get the answer?

acxbox22 · Answer

compounded ANNUALLY means once a year
so plug in the values and solve
A=1200(1+0.1)^2