Question

Find the compound interest earned by the deposit. Round to the nearest cent. $11,000 at 2% compounded annually for 17 years.A) $3520.00B) $4402.66C) $4100.64D) $3740.00

Answer 1

Compound Interest Formula:

$CI=P(1+\frac{r}{n})^{nt}$

where:

P = $11,000

r = 0.02

n = 1

t = 17

Hence:

$CI=11,000\times(1+0.02)^{17}=15,402.66$

Interest earned:

$15,402.66-11,000=4,402.66$

ANSWER

B) $4402.66