Question

Find the compound interest on $4000 for 2 years and 3months at 2% per annum,

compounded annually.

Answer 1

CI = $182.25

Explanation:

Compound interest formula:

`Compound \space\ Interest= P(1 + (r)/(100))^(n) - P` ,

where P is the principal amount ($4000), r is the interest rate (2%), and n is the time period (2 years and 3 months = 2.25 years).

Using formula:

CI =
`4000(1 + (2)/(100) )^(2.25) - 4000`

CI = $182.25