Question

James invests $20,000 in an account that offers a compound interest rate of

8.3% per year. Which of the following is the correct equation for how much
James will have after 6 years?

Answer 1

James will have $32,270.13 after 6 years

Answer 2

`y=20000(1.083)^6`

Explanation:

Let y represents the amount James have after 6 years,

Given,

Principal amount, P = $ 20,000,

Compound rate of interest per year, r = 8.3 %,

Thus, the amount after x years would be,

`A=P(1+(r)/(100))^x`

`=20,000(1+(8.3)/(100))^x`

`=20000(1.083)^x`

Therefore, the amount after 6 years would be,

`y=20000(1.083)^6`

Which is the correct equation that represents the amount, James will have after 6 years.