Question

when Lisa and Tom had their first child. they put $7,500 into a savings account, that earns 6% compound interest. if Lisa and Tom did not add or remove anything ,from the savings account. how much interest will they have earned after 4 years. ​

Answer 1

$1,968.6

Explanation:

Compound Interest = [P * (1 + i)ⁿ] - P

P = principal = $7,500

i = annual interest rate = 6%

n = number of periods = 4 years

Compound Interest = [$7,500 * (1 + 0.06)⁴] - $7,500

Compound Interest = [$7,500 * (1.06)⁴] - $7,500

Compound Interest = [$7,500 * (1.06)⁴] - $7,500

Compound Interest = [$7,500 * 1.26247696] - $7,500

Compound Interest = $9,468.5772 - $7,500

Compound Interest = $1,968.5772