Question

Chris owes $17,000 to a bank. The debt grows with 8% annual interest that compounds every year. How

much will Chris owe in one year?

A. 18,014
B. 18,242
C. 18,360
D. 18,557

Answer 1

• Interest rate=8%

interest

`\\ \rm\longmapsto 17000* 8\%`

`\\ \rm\longmapsto 17000* (8)/(100)`

`\\ \rm\longmapsto 170(8)`

`\\ \rm\longmapsto 1360`

Total

`\\ \rm\longmapsto 17000+1360=18360`

Option C is correct

Answer 2

18360

Explanation:

A = P (1 + r/n)^(nt) where A is the amount in the account, P is the principle, r is the interest rate , n is the times compounded per year, t is the number of years

A = 17000 (1 + .08/1)^(1*1)

A = 17000( 1.08)^1

A = 18360