To find the missing final amount and interest earned, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = Final Amount
P = Principal
r = Interest Rate
n = Number of times interest is compounded per year
t = Time in years
Using the given values, we can substitute them into the formula:
P = $7200
r = 2% = 0.02
n = 1 (since interest is compounded annually)
t = 25 years
A = 7200(1 + 0.02/1)^(1*25)
A = 7200(1 + 0.02)^25
A ≈ 7200(1.02)^25
A ≈ 7200(1.551328376)
A ≈ $11,170.26
The missing final amount is approximately $11,170.26.
To find the compound interest, we subtract the principal from the final amount:
Compound Interest = Final Amount - Principal
Compound Interest = $11,170.26 - $7200
Compound Interest ≈ $3,970.26
The missing compound interest is approximately $3,970.26.
Find the missing final amount (future value) and interest earned.
Principal
Rate
Compounded
Time
Final
Amount
Compound
Interest
$7200
4
1
2%
annually
25 years
_____
_____
1 answer
1 answer