Question

What is the total compound interest of a loan for $5,000 with an annual interest rate of 8 percent at the end of a two-year period?

a.800
b. 832
c.432
d.400

Answer 1

It's D because 5x8 = 40 and look at the extra zeros

Answer 2

Fv=5000(1+0.08)^2=5,832
Interest earned=5832-5000=832