Question

Stuck on this could you check and see if I am right?

Answer 1

It is given that principal is 250 dollar at 6 percent compounded.

a. Annually.

Use n=1

Use the formula for amount.

`A=P(1+(r)/(n))^(nt)_{}`

Substitute the values.

`A=250(1+(6)/(100))^8=250(1.06)^8`
`A=398.46dollar`

For the interest , A=P+I.

Substitute the values,

`398.46=250+I`
`I=398.46-250=148.46dollar.`

B. Quarterly.

Use n =4

Use the formula for amount.

`A=P(1+(r)/(n))^(nt)`
`A=250(1+(6)/(100*4))^(4*8)=250(1+0.015)^(32)`
`A=402.58dollar.`

The interest is determined as A=P+I.

`I=402.58-250=152.58\text{ dollar}`

C. Monthly.

Use n =12

Use the amount formula.

`A=P(1+(r)/(n))^(nt)`

Substitute the values.

`A=250(1+(6)/(100*12))^(12*8)`
`A=250(1+0.005)^(96)=403.54dollar`

Hence the amount is 403.54 dollar.

For interest , A=P+I

Substitute the values and find I,

`403.54-250=I`
`I=153.54dollar.`

Hence the interest earned is 153.54 dollar.