Jaina and Tomas compare their compound interest accounts to see how much they will have in the accounts after three years. They substitute their values shown below into the compound interest formula. Compound Interest Accounts Name Principal Interest Rate Number of Years Compounded Jaina $300 7% 3 Once a year Tomas $400 4% 3 Once a year Which pair of equations would correctly calculate their compound interests?
Answers
Given : Jaina $300 7% 3 Once a year
Tomas $400 4% 3 Once a year
To Find : Compound Interest for each Year
Solution:
Sum = P
Rate of interest = R
Time n =
A = P(1 + R/100)ⁿ
P = 300 , R = 7
Time Amount Interest Cumulative interest
1 321 21 21
2 343.47 22.47 43.47
3 367.513 24.043 67.513
P = 400 , R = 4
Time Amount Interest Cumulative interest
1 416 16 16
2 432.64 16.64 32.64
3 449.946 17.306 49.946
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Step-by-step explanation:
CI=A-P
where p is principal and A is amount
A=p(1+r%/100)^t
where p is principal r is rate t is time.