Question

Enter your searchrmFind the compound interest and future value. Do not round intermediate steps. Round your answers to the nearest cent.Principal Rate Compounded Time$895Annually11 years2%The future value is $, and the compound interest is $ХS

Answer 1

Given:

Principal, P = $895

Time, t = 11 years

Rate, r = 2% compounded annually.

Let's find the compound interest and the future value.

To find the future value apply the formula:

$A=P(1+r)^t$

Where:

A is the future amount.

P is the principal = 895

r is the rate = 2% = 0.02

t is the time in years = 11

Hence, we have:

$\begin{gathered} A=895(1+0.02)^{11} \\ \\ A=895(1.02)^{11} \\ \\ A=895(1.2433743) \\ \\ A=1112.82 \end{gathered}$

Therefore, the future value is $1112.82

To find the compound interest, substitute the principlal (P) from the future value (A).

Compound interest = $1112.82 - $895

= $217.82

The compound interest is $217.82

A