Question

Use the formula to solve the problems.

P(1+r)t

The amount that results when $6,000 is compounded at 7% annually over eight years.

The interest earned in this case.

Answer 1

$4,309.12

Explanation:

The computation of the interest earned is given below:

But before that the amount would be

Amount = Principal × (1 + rate of interest)^number of years

= $6,000 × (1 + 0.07)^8

= $6,000 × 1.07^8

= $10,309.12

Now the interest earned is

= Amount - principal

= $10,309.12 - $6,000

= $4,309.12