Question

Use the formula to solve the problems.

B × In

The amount that results when $6,000 is compounded at 7% annually over eight years=____

The interest earned in this case= ___

Answer 1

Using your formula:

$6000 * .07(8) = ?

However, after the first year, the principal is 6000 + .07(6000) = $6420, so the second year's interest = $6420 * .07(6420) = ?

You need to revise your formula.

Answer 2

6000*.07(8)=3,360