Question

How much compound interest is earned on $1750 at 2% interest for 4 years, compounded annually? Give your answer in dollars and cents. Don’t forget to subtract P from A.

Compound Interest

Answer 1

Okay, now we're onto complex interest, a less fun version of simple interest. Like I described earlier, we add the interest onto your principal annually. I'm pretty sure you remember the formula, so I'll just give you the answer for the first month. 1785. That's the answer for year #1. But not so fast. Now we need to answer the next three months... We take 1785 and multiply it by 1.02. We get 1820.70. Then we take 1820.70... Bla bla bla, we get approx 1857.11. I'll leave the last month for you. Take the current principal, 1857.11, multiply it by the interest and tell me how much we have at the end of four years.

Answer 2

I was jumping between months and years, darn typos. I meant years.

Answer 3

im confused.....so multiply 1857.11 times what?

Answer 4

1.02. The interest rate.

Answer 5

so 1857.11 times 1.02? and then ther is my final answer?

Answer 6

Yep! That's correct!

Answer 7

ok thanks let me see what i get

Answer 8

Okay! ^-^

Answer 9

1894.2522

Answer 10

???????