Question

You deposit $750 into an account that earns 8% interest, compounded yearly. How much money is in the account after 7 years (assuming you did not withdraw or deposit any of it)?

Answer 1

$1,285.37

Explanation:

After 8% interest, the amount increases to 108% of the previous year.

108% = 1.08

After 7 years,

750 × (1.08)⁷

1,285.3682015846

Answer 2

1285.37

Step-by-step explanation: You can use the formula for compound interest:

P(1+R)^t

P = the principle, the amount of money

(1+R) = the rate, (%) as a decimal plus 1

^t = to the power of the number of years

Substitute the values:

750(1+0.08)^7

750(1.08)^7

1285.37