Question

use calculator to find both the compound amount and the interest on $7000 at 12% for 2 years. Interest is compounded quarterly. what is compound amount? round to the nearest cent as needed what is the Interest? Round to the nearest cent as needed

Answer 1

Compound amount = $8867.39

compound interest = $1867.39

Step-by-step explanation

Given:

Principal(p) = $7000 Rate(r) = 0.12 Time(t) = 2 n= 4

We can calculate the compound amount(A) using the formula below:

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

Substitute the values and evaluate.

`A=7000(1+(0.12)/(4))^(4*2)`

`=7000(1+0.03)^8`
`=7000(1.03)^8`
`\approx8867.39`

Hence, the compound amount = $8867.39

We proceed to find the compound interest.

A = P + I

⇒ I = A - P

= 8867.39 - 7000

=1867. 39

Therefore, the compound interest = $1867.39