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
Algebra ->
Customizable Word Problem Solvers
-> Finance
-> 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
Log On
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
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
(