Question

The sum of $8000 was deposited at 8 percent interest compounded annually. How much money was in the bank at the end of 2 years?

Answer 1

$9331.20

Explanation:

The formula for compound interest is `A=P(1+r/n)^(nt)` where `A` is the amount after `t` years of an initial amount (principal) of `P` compounded `n` times annually at an annual rate of `r`.

This problem asks you to solve for `A` so all you have to do is plug in the other values.

`A=8000(1+0.08/1)^(1xx2)`
`A=8000(1.08)^2`
`A=9331.2`