Answer:
Step-by-step explanation:
A = P(1 + r/n)nt for compound interest
A = final amount
p = principal invested
r = interest rate as a decimal
t = # years invested
In this case A = 1200(1 + .03/1)1(3)
A = 1200(1.03)3
A = 1311.27
To find how much of the final total was interest you must subtract out the principal amount invested
I = 1311.27 - 1200 = $111.27
Siobhan deposits $1200 into a savings account that pays 5.2% annual interest compounded monthly. The amount will be $269.75.
If the initial amount (also called as principal amount) is P, and the interest rate is R% per unit time, and it is left for T unit of time for that compound interest, then the interest amount earned is given by:
[tex]CI = P\left(1 +\dfrac{R}{100}\right)^T - P[/tex]
The final amount becomes:
[tex]A = CI + P\\\\A = P\left(1 +\dfrac{R}{100}\right)^T[/tex]
A = P(1 + r/n)nt for compound interest
A = final amount
p = principal invested
r = interest rate as a decimal
t = # years invested
In this case
[tex]A = 1200\left(1 +\dfrac{5.2}{100}\right)^4[/tex]
A = 1200 ( 1.22)
A = 1469.75
The total was interest you must subtract out the principal amount invested.
I = 1469.75 - 1200
I = $269.75
Learn more about compound interest here:
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