Answered

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k= 12, r=4%, po=$10,000, n=25 using the compound interest formula

Sagot :

The compound interes formula is given by:

[tex]P_N=P_0(1+\frac{r}{k})^{Nk}[/tex]

where P0 is the principal (the initial amount), r is the interes rate (in decimal form), k is the number of times the interest is compounded and N is the time elapsed.

Plugging the values given we have:

[tex]\begin{gathered} P_N=10000(1+\frac{0.04}{12})^{12\cdot25} \\ =27,137.65 \end{gathered}[/tex]

Therefore the future amount is $27,137.65 and the interest earned is $17,137.65.

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