Question

Glenn invested $15,000 at 3% interest compounded annually. How much interest will Glenn earn in 4 years?

Answer 1

Glenn will earn $1800 in 4 years because for one year the interest is $450 so in four it would be $1800

Answer 2

Total compounded interest = P(1 + r)^t - P

Total compounded interest = [15,000 (1 + 0.03)^4 ] - 15,000

Total compounded interest = 16,882.63 - 15,000

Total compounded interest = 1,882.63

Answer: $1,882.63