Question

Chanelle deposits 7,500 into the bank. She does not withdraw or deposit money for 6 years. She earns 6% interest during that time.

A. how much interest will she have earned at the end of 6 years?

B. What will the balance be when she is finally able to withdraw her money?

Answer 1

One second. :D

Answer 2

Ok, so, every year she is gaining interest of 0.06

Answer 3

That means that at the end she should earn 6*0.06.

Answer 4

Aka 0.36. 0.36 will allow you to find your second answer. :D

Answer 5

@nightmare54362

Answer 6

simple interest formula (just googled it)
\[ A=P(1+it) \]
where A is the final amount, P is the principal, i is the interest rate and t is the time (in years)

in our case we have to find A, we are given P=$7500 ; i=6% or 0.06 ; t=6 years
thus, we just solve this:
\[ A=7500(1+0.06 \times 6) \]
\[ A=7500 \times 1.36 \]
\[ A=10200 \]

usually, i would do it the long way around (every year they get their 6%):

1st year: \( 7500 \times 1.06 = $ 7950 \)
2nd year: \( 7950 \times 1.06 = $ 8427 \)
3rd year: \( 8427 \times 1.06 =$8932.62 \)
4th year: \( 8932.62 \times 1.06 = $ 9468.5772 \)
5th year: \( 9468.5772 \times 1.06 = $ 10036.69 \)
6th year: \( 10036.69 \times 1.06 = \color{lightskyblue}{$10638.8914} \)

i am not sure if this is the same, but the logic seems right