Question

Suppose Shen places $8500 in an account that pays 17% interest compounded each year.

What is the amount in the account at the end of 1 year?

Answer 1

$9,945

Explanation:

Principal = $8,500

Rate = 17% = 0.17

Number of times compounded in a year, n = 1

Period, t = 1 year

Amount, A = P(1 + r/n)^tn

A = 8500( 1 + 0.17/1)^ 1*1

A = 8500( 1.17)^1

A = $9,945