Question

Find compound interestFind the compound interest and the total amount after an hour if the interest is compounded every tenminutes.Principal = 512Rate of interest = 5% per minuteTotal amount =Compound interest=*Stuck? Review related articles/videos or use a hint.Report a problem

Answer 1

The compound interest formula is:

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

where A is the final amount, P is the initial investement, r is the interest rate in decimal form and n is the number of times the interest is compounded in any given time t.

In this case P is 512, r=.05, n=6 (in one hour the interest is compounded six times) and t is 1, then we have:

`\begin{gathered} A=512(1+(0.05)/(6))^(6\cdot1) \\ =538.14 \end{gathered}`

Therefore the final amount is $538.14 and the interest earned is $26.14