Question

You deposit $23,400 into a savings account that earns 7.5% annual interest.

a=
Write the equation:
How much will be in the account after 8 years?

Answer 1

$41,734

Explanation:

To solve this problem, we use the compound interest formula:

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

where

A is the total amount received

P is the principal

r is the interest rate

n is the number of times interest is coumpounded per unit time

t is the time

In our problem:

P=$23,400 is the principal

r = 7.5 % = 0.075 is the interest rate

n = 1 (annual interest)

t = 8 (8 years)

Substituting,

`A=(23,400)(1+(0.075)/(1))^((1)(8))=41734`

So, I will receive $41,734 after 8 years.