Question

find the compound interest on 8000 for 2 years at 6% per annum

Answer 1

The amount is $8988.8 and the interest is $988.8.

To find amount we use formula:

A=P(1+rn)n⋅t

A = total amount  

P = principal or amount of money deposited,

r = annual interest rate  

n = number of times compounded per year

t = time in years

In this example we have

P=$8000 , r=6% , n=1 and t=2 years

After plugging the given information we have

AAAA=8000(1+0.061)1⋅2=8000⋅1.062=8000⋅1.1236=8988.8

STEP 2: To find interest we use formula A=P+I, since A=8988.8 and P = 8000 we have:

A8988.8II=P+I=8000+I=8988.8−8000=988.8