Question

The principal represents an amount of money deposited in a savings account subject to compound interest at the given rate. Principal Rate Compounded Time $ 7000 8 % annually 4 years A. Find how much money there will be in the account after the given number of years. B. Find the interest earned.

Answer 1

Answer:

Results are below.

Explanation:

Giving the following information:

Present value(PV)= $7,000

Number of periods (n)= 4 years

Interest rate (i)= 8% annually

To calculate the future value of the investment, we need to use the following formula:

FV= PV*(1 + i)^n

FV= 7,000*(1.08^4)

FV= $9,523.42

Now, the interest earned:

Interest earned= FV - PV

Interest earned= 9,523.42 - 7,000

Interest earned= $2,523.42