Question

James invests $20,000 in an account that offers a compound interest rate of8.3% per year. Which of the following is the correct equation for how muchJames will have after 6 years?

Answer 1

Given:

The principal, P =$20000

The interest rate is r = 8.3 %

Time, t =6 years.

Required:

We need to find the equation to find the amount after 6 years in the account.

Step-by-step explanation:

The interest rate is

`r=8.3\text{ \%=}(8.3)/(100)=0.083`

Consider the formula to find the amount after 6 years.

`P_t=P\cdot(1+r)^t`

Substitute P =20000, r =0.083, and t =6 in the formula.

`P_6=20000\cdot(1+0.083)^6`

Final answer:

`P_6=20000\cdot(1+0.083)^6`