Given:
$8000 is placed in an amount that pays 17% interest compounded each year.
Required:
A) Find the amount in the account at the end of 1 year.
(B) find the amount in the account at the end of 2 years.
Explanation:
The amount formula when interest is compound yearly is given as:
[tex]A=P(1+r)^t[/tex]Where P = principal
r = interest rate
t = time
(a)
[tex]\begin{gathered} A=8000(1+0.17)^1 \\ A=8000(1.17) \\ A=9360 \end{gathered}[/tex]Thus the amount after 1 year is $9360.
(b)
[tex]\begin{gathered} A=P(1+r)^2 \\ A=8000(1+0.17)^2 \\ A=8000(1.17)^2 \\ A=8000(1.3689) \\ A=10,951.2 \end{gathered}[/tex]Thus the amount after 1 year is $10,951.2
Final Answer:
(a) $9360
(b) $10,951.2
