Question

$8,000 was deposited into an account that was compounded annually at 6% interest over 7 years. How much interest was earned on the account? Interest=(

Answer 1

Answer:$4029

Explanation:

Given

Principal amount
`P=\$8000`

Interest rate
`R=6\%`

Time period
`T=7\ yr`

Amount after T years is given by

`A=P[1+R\%]^T`

Put values

`\Rightarrow A=8000[1+0.06]^7\\\Rightarrow A=\$12,029`

Interest is the difference of amount and principal, that is

`\Rightarrow C.I.=12,029-8000=\$4029`