Question

Huan deposited $850 into a college savings account earning 4.8% interest compounded annually. He also deposited $850 into a second account earning 4.8% simple interest. He made no additional deposits.How much interest does the first account earn in 10 years?

Answer 1

Step-by-step explanation:

first account

principal = $ 850

rate = 4.8 %

time = 10 years.

Amount = principal (1+rate/100)^time

= 850 (1 + 4.8 / 100)^10

= 850 ( 1.048)^10

= 850 * 1.598

= 850 * 1.60

= 1360

amount = $ 1360

compound interest = amount - principal

= 1360 - 850 = 110 $

interest = 110 $