Question

Help!! I’ll give you 2000 points!!

Answer 1

The interest earned on Mary's investment after 2 years is $40.88

Answer 2

(a) There is $1740.88 in Mary's account after 2 years

(b) The interest earned on Mary's investment after 2 years is $40.88

Explanation:

Let us revise the rule of the compound interest

→
`A=P(1+(r)/(n))^(nt)` , where

• A is the future value of the investment/loan, including interest
• P is the principal investment amount
• r is the annual interest rate (decimal)
• n is the number of times that interest is compounded per unit t
• t is the time the money is invested or borrowed for

∵ She invested $1700

∴ P = 1700

∵ The rate is 1.19%

∴ r = 1.19/100 = 0.0119

∵ It is compounded quarterly

∴ n = 4

∵ She decided to invest her money for 2 years

∴ t = 2

Let us substitute these values in the rule above to find her new amount of money in her account

→
`A=1700(1+(0.0119)/(4))^(4(2))`

→
`A=1700(1.002975)^(8)`

→
`A=1740.883806` dollars

Round it to the nearest cent → means 2 decimal places

→ A = $1740.88

(a) There is $1740.88 in Mary's account after 2 years

The interest amount is the difference between the new amount and the initial amount

`I=A-P`

∵ P = 1700

∵ A = 1740.88

∴
`I=1740.88-1700`

∴ I = $40.88

(b) The interest earned on Mary's investment after 2 years is $40.88