Suppose Frank places $8500 in an account that pays 14% Interest compounded each year.
Assume that no withdrawals are made from the account.

find the amount after year 1 and year 2

Respuesta :

[tex]~~~~~~ \textit{Compound Interest Earned Amount} \\\\ A=P\left(1+\frac{r}{n}\right)^{nt} \quad \begin{cases} A=\textit{accumulated amount}\\ P=\textit{original amount deposited}\dotfill &\$8500\\ r=rate\to 14\%\to \frac{14}{100}\dotfill &0.14\\ n= \begin{array}{llll} \textit{times it compounds per year}\\ \textit{each year, thus once} \end{array}\dotfill &1\\ t=years\dotfill &1 \end{cases}[/tex]

[tex]A=8500\left(1+\frac{0.14}{1}\right)^{1\cdot 1}\implies A=8500(1.14)\implies \boxed{A=9690} \\\\[-0.35em] \rule{34em}{0.25pt}\\\\ ~~~~~~ \textit{Compound Interest Earned Amount}[/tex]

[tex]A=P\left(1+\frac{r}{n}\right)^{nt} \quad \begin{cases} A=\textit{accumulated amount}\\ P=\textit{original amount deposited}\dotfill &\$8500\\ r=rate\to 14\%\to \frac{14}{100}\dotfill &0.14\\ n= \begin{array}{llll} \textit{times it compounds per year}\\ \textit{each year, thus once} \end{array}\dotfill &1\\ t=years\dotfill &2 \end{cases} \\\\\\ A=8500\left(1+\frac{0.14}{1}\right)^{1\cdot 2}\implies A=8500(1.14)^2\implies \boxed{A=11046.6}[/tex]