Question

A man invested $15,000 for 2 years in compound interest. After one year, his money amounted to the rate of interest and interest for the second year. ​

Answer 1

To find the accumulated amount after two years with compound interest, we can use the formula: $15,000(1 + r + r^2).

Step-by-step explanation:

In compound interest, the interest is calculated on both the initial investment and any accumulated interest. To solve this problem, we need to find the accumulated amount after one year, which represents the principal amount for the second year. Let's assume the rate of interest is 'r'. After one year, the amount is $15,000 + $15,000*r. So, for the second year, the amount will be ($15,000 + $15,000*r) + ($15,000 + $15,000*r)*r = $15,000(1 + r) + $15,000(1 + r)r = $15,000(1 + r + r^2).