Question

A sum of $30000 is to be invested in the bank which pays a compound interest rate of 6%,(i)calculate the total interest earned on the invested amount after 10years.

Answer 1

Total interest earned on the invested amount is $23,725.431

Step-by-step explanation:

We are given that a sum of $30000 is to be invested in the bank which pays a compound interest rate of 6%.

Let P = Principal sum of money

     R = Rate of interest

     T = Time period

     A = Amount of money

As we know that the formula for calculating amount in case of compound interest is given by;

                  $\text{Amount}=\text{Principal} \times (1+\text{Rate of interest})^{\text{Time}}$

                                               Or

                             $A=P\times (1+R)^{T}$

Now, in the question we are provided with P = $30,000 , R = 6% and Time period, T = 10 years.

So,            Amount  =  $30,000\times (1+\frac{6}{100} )^{10}$

                                =  $30,000\times (1+0.06 )^{10}$

                                =  $30,000\times (1.06)^{10}$

                                =  53725.431

Hence, amount of money after 10 years is $53725.431.

Now, Compound Interest is given by;

              Amount  =  Principal + Compound Interest

        $53,725.431  =  $30,000 + Compound Interest

So, Compound interest  = $53,725.431 - $30,000

                                        =  $23,725.431

Therefore, the total interest earned on the invested amount after 10 years is $23,725.431.

Learn more about compound interest questions;

https://brainly.in/question/2492666