SOLUTION: Calculate the total interest earned for the investment below.
Principal = $8200
Rate of Compound Interest per Year = 2.8%
Compounding Period = quarterly
Time = 15 years
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Question 1202636: Calculate the total interest earned for the investment below.
Principal = $8200
Rate of Compound Interest per Year = 2.8%
Compounding Period = quarterly
Time = 15 years
Answer by math_tutor2020(3817) (Show Source): You can put this solution on YOUR website!
Compound interest formula
A = P*(1+r/n)^(n*t)
where,
A = final amount
P = deposit
r = annual interest rate in decimal form
n = compounding frequency
t = number of years
In this case
P = 8200
r = 0.028
n = 4
t = 15
A = P*(1+r/n)^(n*t)
A = 8200*(1+0.028/4)^(4*15)
A = 8200*(1.007)^(60)
A = 12461.8375505852
A = 12461.84
This is the final balance.
Subtract off the deposit to determine the interest earned.
i = A - P
i = 12461.84 - 8200
i = 4261.84
Answer: $4261.84
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