Question

James invests 20k in an account that offers a compound interest rate of 8.3% per year for 6 years. I need to know which one is the correct answer 1. a(6)=20,000×(1+0.83)⁶‐¹2. a(6)=20,000×(1+0.083)⁶+¹3. a(6)=20,000×(1+0.083)⁶‐¹4. a(6)=20,000×(1+0.083)⁶

Answer 1

Given,

The principal amount is 20k.

The rate of interest is 8.3%.

The time period is 6 Years.

Required

The amount of investment after 6 years.

The amount is calculated as,

`\begin{gathered} Amount=principal*(1+(rate)/(100))^(time) \\ =20000*(1+(8.3)/(1000))^6 \\ =20000*(1+0.083)^6 \\ =20000*(1+0.083)^6 \end{gathered}`

Hence, the amount after 6 years is 2000 x (1 + 0.083)^6.