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17 February, 01:28

What is the total compound interest of a loan for $5,000 with an annual interest rate of 8 percent at the end of a two-year period? $400 $432 $832 $800

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  1. 17 February, 02:31
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    The formula to find compound interest is

    A = P (1 + r/n) ^nt

    Use this to solve your problem.

    A = 5,000 (1 + 0.08/1) ^1•2

    A = 5,000 • 1.1664

    A = 5,832

    Now this question is only asking about the interest gained. To find this, subtract the original amount from the new amount.

    5,832 - 5,000 = 832

    Your answer is $832
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