Question

10. Find the compound interest on
(a) $450 for 2 years at 10% per annum
compounded yearly,​

Answer 1

p=original principal

i=interest rate per compounding period

n=number of compounding periods

x=new amount of money

So start pulling pieces from the question.

-What was the original amount you started with? $450 (p)

-What is the interest rate per compounding period? 10% (i)

-How many times does it compound? 2 (n)

-We are looking for X

So take the original formula

p%2A%28%281%2Bi%29%5En%29=x

substitute in what you know, and solve for X

450%2A%28%281%2B.10%29%5E2%29=x

x=450%2A%281.1%5E2%29=450%2A1.21=544.50

So you started with $450 and ended with $544.50. How much does that mean you earned?

544.50-450=94.50