SOLUTION: Shawna opens a bank account with $400. The account accrues 8% interest compounded annually. How much money, to the nearest cent, will she have in her account at the end of 4 yea

Question 1028614: Shawna opens a bank account with $400. The account accrues 8% interest compounded annually.
How much money, to the nearest cent, will she have in her account at the end of 4 years? (Use the formula A=P(1+rn)nt, where P= initial amount of money, r = interest rate, t = the number of years, and n = number of times the interest is compounded per year.) Round your answer to the nearest cent.
Shawna wants to calculate the amount she will earn between year 4 and year 8.
How much interest will Shawna earn during this time?

Answer by LinnW(1048) (Show Source): You can put this solution on YOUR website!

The (1) is the number of compounding periods per year
The (4) is the number of years.

The amount of interest is 544.20 - 400 = $144.20
Now determine the amount after a total of 8 years

New amount = 740.37
So between the end of year 4 and year 8
the increase is 740.37 - 544.20 = $196.17
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