Question

The compound amount is $…The amount of interest earned is $…

Answer 1

In order to calculate the compound amount and the amount of interest earned, we can use the formula below:

`A=P\cdot(1+(i)/(n))^(nt)`

Where A is the compound amount after t years, P is the principal (initial amount) i is the interest rate and n is how many times the interest is compounded in a year.

So, for P = 71000, i = 0.0102, t = 4 and n = 4, we have:

`\begin{gathered} A=71000\cdot(1+(0.0102)/(4))^(4\cdot4)_{} \\ A=71000\cdot(1+0.00255)^(16) \\ A=73952.87 \end{gathered}`

Therefore the compound amount is $73952.87

The amount of interest is:

`\begin{gathered} I=A-P \\ I=73952.87-71000 \\ I=2952.87 \end{gathered}`

So the amount of interest earned is $2952.87.