Question

B * In Using the expression above, choose the correct answers for the new balance and the amount of interest earned in the following compound interest problem. $850 at 8% for 8 years, compounded annually. Total Amount = $ Interest Amount = $

Answer 1

In 8 years, you will have $1,573.29 thus $850-$1573.29 = $ 723.29 in interest

Answer 2

Answer: Total Amount = $1573.29

Interest Amount =$723.29

Explanation:

The formula to find the compound amount is given by :-

`A=P(1+r)^t`, where P is the Principal amount , r is the rate of interest ( in decimal) and t is the time period ( in years).

Given : P= $850 : r= 8%=0.08 ; t= 8 years

Then, the compound amount after 8 years if compounded annually :-

`A=850(1+0.08)^8\\\\\Rightarrow\ A=850(1.08)^8\\\\\Rightarrow\ A=850(1.85093021028)\\\\\Rightarrow\ A=1573.29067874\approx1573.29`

Hence, Total Amount = $1573.29

Interest Amount = Total Amount -Principal amount

=$1573.29- $850 =$723.29

Thus, Interest Amount =$723.29