17. Sam deposited $4,625 into a bank account that earns 3 3/4% compound interest, compounded annually. Calculate Sam's interest and total after 2 years. A = P(1 + r)

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asked May 28, 2021 54.6k views

1 Answer

Tabalin · Answer 1 · 2021-06-02T16:29:09+0000

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Answer:

Explanation:

The equation for calculating the balance in an account earning compound interest is ...

A = P(1 +r)^t

where r is the annual rate and t is the number of years.

For Sam's account, the balance after 2 years is ...

A = $4625(1 +0.0375)^2 = $4978.38

The interest is the amount in excess of the deposited amount:

$4978.38 -4525.00 = $353.38

Sam's interest was $353.38, giving him a total of $4978.38.