Question

At the end of eight years, how much is an initial deposit of $1500 worth, assuming a compound annual interest rate of 5 percent

Answer 1

Answer:

Step-by-step explanation:

okay so basically there's this formula for compound interest P(1 + r/n)^(nt)

where P is the initial amount

r is the interest rate

n is number of times interest applied per time period

t is the time period

so according to that

ans = 1500(1 + 0.05/1)^(8)

(it's 0.05 because u will write the internet rate in decimals so 5%  is will be 0.05)

u solve the formula

and u get 2216.18 will be the amount at the end of 8 years.

you can also prove this formula by

1st yr 1500*105/100 = 1575

2nd 1575*105/100 = 1653.75

3rd 1653.75*105/100 = 1736.43

4th 1736.43*105/100 = 1823.25

5th 1823.25*105/100 = 1914.42

6th 1914.42*105/100 = 2010.14

7th 2010.14*105/100 = 2110.6

8th 2110.6*105/100 = 2216.18