Question

Can you please do exactly what each problem says they all GO TOGETHER!

Answer 1

From the question

The principal is $6500

a. The equation needed to calculate the compound interest is

`A=P(1+r)^t`

Where

A = amount earned

P= principal

r= rate

t= time

b. Give:

t= 10 years

r = 3.7%

Substitute the values into the compound interest formula:

`A=\$6500(1+3.7\%)^(10)`

Calculate the value of A

`\begin{gathered} A=\$6500(1+0.037)^(10) \\ A=\$9347.62 \end{gathered}`

Hence the value of the account after 10 years is $9347.62

c. substitute t=20 into the formula

`A=\$6500(1.037)^(20)`

Solve for A

`A=\$13442.76`

Therefore the value of the account after 20 years is $13442.76

Since the account value after 20 is $13442.76 and the value earned over 10 years is $9347.62 then the extra interest earned is

`\$13442.76-\$9347.62=\$4095.14`

Therefore He earned $4095.14 more in interest