57.4k views
0 votes
An investment of $750 is made into an account that earns 9% annual compound interest for 2 years. Assuming no other deposits or withdrawals are made, find the following:

Interest:

Total value:

User Rabbits
by
8.1k points

1 Answer

4 votes

Answer & Step-by-step explanation:

The formula used to compute the total value of a compound interest investment after a given period of time is A = P (1 + r/n)^(n*t), where A is the total value, P is the initial investment amount, r is the annual interest rate (in decimal form), n is the number of times the interest is compounded per year, and t is the duration of the investment. Applying this formula to an initial investment of $750 that earns 9% annual compound interest for 2 years, we obtain a total value of $905.63. By subtracting the initial investment amount of $750 from the total value, we find that the interest earned on the investment over 2 years is $155.63.

Hope it helps! : )

User Dominik Dorn
by
7.6k points