Answer to Question #107411 in Financial Math for Haider ali

Question

5,100 dollars invested for 10 years at 9 percent compounded annually is?

Answer 1

We need to find the compound interest.

Given,

$$P = \$5100 \\ t= 10 \space years \\ r=9\% = 0.09 \\ compounded \space Annually, so \space n = 1$$

Formula to find the compound interest $= Amount - Principal$

$= P (1 + \frac{r}{n})^{nt} - P$

$$= 5100 ( 1+ \frac{0.09}{1})^{10 \times 1} -5100 = 5100 (1.09)^{10} - 5100$$

$$= 5100 \times 2.3673 - 5100 = 12073.23 - 5100 = 6973.23\\$$

$Amount=compound\, interest+Principal$

Answer:

The compounded interest = $\$ 6973.23$