Question

Suppose Tammy places $7500 in an account that pays 14% interest compounded each year.

Follow the instructions below. Do not do any rounding.

Find the amount in the account at the end of 1 year.

Find the amount in the account at the end of 2 years.

Answer 1

Answer: First year: $8550, Second year: $9747

Explanation:

7500*(114/100)^1 = 8550

The answer for first year: $8550

7500*(114/100)^2 = 9747

The answer for second year = $9747