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use calculator to find both the compound amount and the interest on $7000 at 12% for 2 years. Interest is compounded quarterly. what is compound amount? round to the nearest cent as needed what is the Interest? Round to the nearest cent as needed

Sagot :

Compound amount = $8867.39

compound interest = $1867.39

EXPLANATION

Given:

Principal(p) = $7000 Rate(r) = 0.12 Time(t) = 2 n= 4

We can calculate the compound amount(A) using the formula below:

[tex]A=P(1+\frac{r}{n})^{nt}[/tex]

Substitute the values and evaluate.

[tex]A=7000(1+\frac{0.12}{4})^{4\times2}[/tex]

[tex]=7000(1+0.03)^8[/tex][tex]=7000(1.03)^8[/tex][tex]\approx8867.39[/tex]

Hence, the compound amount = $8867.39

We proceed to find the compound interest.

A = P + I

⇒ I = A - P

= 8867.39 - 7000

=1867. 39

Therefore, the compound interest = $1867.39

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