Question

Layla opened a savings account and deposited 700.00 as principal the account earns 8%interest compounded annually what is the balance after 6 years​

Answer 1

The balance after 6 years is $1110.812026

Explanation:

The rule of the compound interest is A = P
`(1+(r)/(n))^(nr)`, where

• A is the new amount

• P is the initial amount

• r is the interest rate in decimal

• n is the number of periods

• t is the time in years

∵ Layla opened a savings account and deposited $700.00 as principal.

∴ P = 700

∵ The account earns 8% interest compounded annually

∴ r = 8% = 8 ÷ 100 = 0.08

∴ n = 1 ⇒ compounded annually

∵ The time is 6 years

∴ t = 6

→ Substitute these values in the rule above

∵ A = 700
`(1+(0.08)/(1))^(1(6))`

∴ A = 700
`(1.08)^(6)`

∴ A = 1110.812026

∴ The balance after 6 years is $1110.812026