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Paul, who is self employed, placed $30,000 in an account that pays 6% annual interest, compounded quarterly. How much interest was earned in 10 years?​

User Rami Jarrar
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5 votes

Answer:

Explanation:

We would apply the formula for determining compound interest which is expressed as

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

Where

A = total amount in the account at the end of t years

r represents the interest rate.

n represents the periodic interval at which it was compounded.

P represents the principal or initial amount deposited

From the information given,

P = 30000

r = 6% = 6/100 = 0.06

n = 4 because it was compounded 4 times in a year.

t = 10 years

Therefore,.

A = 30000(1 + 0.06/4)^4 × 10

A = 30000(1 + 0.015)^40

A = 30000(1.015)^40

A = $54421

The amount of interest earned after 10 years is

54421 - 30000 = $24421

User MeV
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