Question

Lindsay invested $4500 at 4% interest compounded annually.

How much interest will she earn in 10 years?

$180.00

$187.27

$1800.00

$2161.10

Answer 1

2161.10

Explanation:

Answer 2

`\$2,161.1`

Explanation:

we know that

The compound interest formula is equal to

`A=P(1+(r)/(n))^(nt)`

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest in decimal

t is Number of Time Periods

n is the number of times interest is compounded per year

in this problem we have

`t=10\ years\\P=\$4,500\\ r=0.04\\n=1`

substitute in the formula above

`A=\$4,500(1+(0.04)/(1))^(1*10)`

`A=\$4,500(1.04)^(10)`

`A=\$6,661.10`

Find the interest

`I=A-P`

`I=\$6,661.10-\$4,500=\$2,161.1`