SOLUTION: one thousand dollars in a savings account pays 7% interest per year. The interest earned after the first year is added to the account. How much interest is earned on the new princi

Question 40348: one thousand dollars in a savings account pays 7% interest per year. The interest earned after the first year is added to the account. How much interest is earned on the new principle the following year?
Thanks you very much

Answer by Nate(3500) (Show Source): You can put this solution on YOUR website!
I = PRT
I = 1000*0.07*1 = 70
now ...
I = PRT = 1070*0.07*1 = 74.9
or
P(a) = a(1 + r)^t = 1000(1.07)^2 = 1144.9
Throughout the time, the total interest is $144.9
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