Question

The compound interest formula is A = P(1 + ) where P is the principal, A is the ending amount, r is the annual interest rate, m is the
number of compounding periods, and is the number of years. Billy invested $8,000 in a savings account paying 3.5 % interest,
compounded monthly. How much will Billy have after 12 years?

O $8,280
O $11, 360
O $12, 168.25
O $10.361.14

Answer 1

This shows that Billy will have $12, 168.25 after 12 years

Compound interest

The formula for calculating the compound interest is expressed as:

• $A = P(1+r/n)^{nt}$

From the information given, the amount is expressed as;

$A = 8000(1+0.035/12)^{12(12)}\\A= |\ 12,168.25$

This shows that Billy will have $12, 168.25 after 12 years

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