Question

How much interest would $1000 earn in one year, at a rate of 6%, compounded anually? Show your work

Answer 1

`~~~~~~ \textit{Compound Interest Earned Amount} \\\\ A=P\left(1+(r)/(n)\right)^(nt) \quad \begin{cases} A=\textit{accumulated amount}\\ P=\textit{original amount deposited}\dotfill &\$1000\\ r=rate\to 6\%\to (6)/(100)\dotfill &0.06\\ n= \begin{array}{llll} \textit{times it compounds per year}\\ \textit{annually, thus once} \end{array}\dotfill &1\\ t=years\dotfill &1 \end{cases} \\\\\\ A = 1000\left(1+(0.06)/(1)\right)^(1\cdot 1) \implies A = 1000( 1.06)^(1)\implies A = 1060`