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4 October, 12:52

Chelsea invested $15,000 at 4% interest compounded annually. How much interest will she earn in 4 years?

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Answers (2)
  1. 4 October, 14:59
    0
    P = 15000, r = 4% = 0.04 per year, n = 4 years.

    A = P (1 + r) ⁿ

    A = 15000 (1 + 0.04) ⁴

    A ≈ 15000 (1.04) ⁴ ≈ 17547.88

    Interest = Amount - Principal = 17547.88 - 15000 = 2547.88

    Interest ≈ $ 2547.88
  2. 4 October, 15:04
    0
    The future worth (F) of the money invested now (P) with the compounded interest (i) is calculated by the equation,

    F = P x (1 + i) ^n

    where n is the number of years. Substituting the known values,

    F = ($15,000) x (1 + 0.04) ^4

    The value of F is $17,547.88.
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