Question

Julio invests $6,100 into an account that earns 5.2% annual compound interest. If Julio makes no additional deposits or withdrawals, which best represents the amount of interest Julio will earn after 8 years?

Answer 1

Therefore Julio will earn $3,050.73 of interest after 8 years.

Explanation:

The compound interest formula:

`A=P(1+\frac rn)^(nt)`

A= Amount after t year.

P= Principal

r=rate of interest

t= time in year

n= 1 when annual compound interest

n=2 when semi compound interest

n=4 when quarter compound interest

Given that, Julio invests $6,100 into an account that earns 5.2% annual compound interest for 8 years.

P=$6,100

r=5.2%=0.052

t= 8 years

`\therefore A= 6100(1+0.052)^8`

=$9150.73

The interest=Amount - Principal

=$(9150.73-6,100)

=$3,050.73

Therefore Julio will earn $3,050.73 of interest after 8 years.