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If you invest $180 in an account that pays 10% interest, find the balance after 10 years?

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Answer

Amount in the account after 10 years (Simple Interest) = 360 dollars

Amount in the account after 10 years (Compound Interest) = 467 dollars

Step-by-step explanation

For simple interest, the interest on an amount invested is given as

SI = (PRT/100)

P = Amount invested = 180 dollars

R = Rate = 10%

T = Time = 10 years

SI = (PRT/100)

= (180 × 10 × 10)/100

= 180 dollars

So,

Amount in the account = Original amount + Interest = 180 + 180 = 360 dollars

For compound interest, the amount in the account after a time t, is give as

A = A₀ (1 + r)ᵗ

A = Amount in the account after a period of time = ?

A₀ = Original amount invested = 180 dollars

r = Rate = 10% = 0.1

t = Time = 10 years

A = A₀ (1 + r)ᵗ

A = 180 (1 + 0.1)¹⁰

A = 180 (1.1)¹⁰

A = 180 (2.594)

A = 466.9 dollars

Hope this Helps!!!

User Andrea Fiore
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