Question

A = 2000(1 + 0.12)³. What is my interest and final amount?

Options:
A. Interest: $720, Final Amount: $2720
B. Interest: $480, Final Amount: $2480
C. Interest: $360, Final Amount: $2360
D. Interest: $600, Final Amount: $2600

Answer 1

The final amount is $3001.28 and the interest is $1001.28.

Step-by-step explanation:

To solve the given equation, we need to apply the formula for compound interest:

A = P(1 + r/n)^(nt)

Where:

• A is the final amount
• P is the principal (initial amount)
• r is the interest rate per period
• n is the number of compounding periods per year
• t is the number of years

In this case, we have:

• P = 2000
• r = 0.12
• n = 1 (assuming annual compounding)
• t = 3

Substituting the values into the formula:

A = 2000(1 + 0.12)³ = 2000(1.12)³ = 3001.28

Therefore, the final amount is $3001.28. To find the interest, we can subtract the principal from the final amount:

Interest = Final amount - Principal = $3001.28 - $2000 = $1001.28

Therefore, the interest is $1001.28.