Problem 1
The given info we have is...
- P = 8000 dollars is borrowed (this is the principal)
- r = 0.04 is the decimal form of 4% interest rate
- t = 5 years have gone by
Plug those values into the formula to get the following:
B = P*(1+r)^t
B = 8000*(1+0.04)^5
B = 9733.2232192
B = 9733.22 when rounding to the nearest cent
B = 9733 when rounding to the nearest dollar
Answer: 9733
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Problem 2
We take the result of the previous problem and subtract off the principal to get the amount of interest
I = B - P
I = 9733 - 8000
I = 1733
Answer: 1733