Answer:
$4,368
Explanation:
This is compound interest. and to calculate compound interest, which is (Amount - Principal) but we dont know the value for amount so we find the amount first by using the formula.
A = P ( 1 + R ) ^n
100
where p = principal ($8,950)
a = amount (?)
r = interest rate (6.85%)
n = time ( no of years) (6)
A = 8,950 ( 1 + 6.85 ) ^6
100 A = 8,950 ( 1 + 0.0685) ^6
A = 8,950 ( 1.0685) ^6
A = 8950 x 1.4881 A = 13,318
WE THEN FIND COMPUND INTEREST C = A MOUNT - PRINCIPAL
13, 318 - 8950 = $4,368