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Sagot :
The compound interest after 20 years is $22700.
What is compound interest?
Compound interest is the interest you earn on interest. Compound interest is the interest calculated on the principal and the interest accumulated over the previous period.
For the given situation,
The principle, p = $10,000
Rate of interest, r = 6.1% = 0.061
Compounded continuously, n = 1
Number of years, T = 20
The amount formula of compound interest is
[tex]A=p(1+\frac{r}{n} )^{T}[/tex]
On substituting the above values,
⇒ [tex]A=10000(1+\frac{0.061}{1} )^{20}[/tex]
⇒ [tex]A=10000(1.061)^{20}[/tex]
⇒ [tex]A=32681.9[/tex] ≈ [tex]32682[/tex]
The compound interest can be calculated as
[tex]CI=A-P[/tex]
⇒ [tex]CI=32682-10000[/tex]
⇒ [tex]CI=22682[/tex] ≈ [tex]22700[/tex]
Hence we can conclude that the compound interest after 20 years is $22700.
Learn more about compound interest here
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