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20 votes
$1,200 at 7% for 4 years

1 Answer

12 votes

Answer:

372.95

Explanation:

To calculate compound interest, which 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 ($1200)

a = amount (?)

r = interest rate (7%)

n = time ( no of years) (4)

A = 1200 ( 1 + 7 ) ^4

100 A = 1200 ( 1 + 0.07) ^4

A = 1200 ( 1.07)^4 , A = 1200 ( 1.31079)

A = 1,572.95

WE now find compound interest with the formula:

C = AMOUNT - PRINCIPAL = $1,572.95 - $1200

C = 372.95

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