Ben put $6,500 into a savings account that earns 2.5% interest each year. How much interest will he earn after 6 years in the savings accoun

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Ben put $6,500 into a savings account that earns 2.5% interest each year. How much interest will he earn after 6 years in the savings account?

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Hồng Cúc 5 years 2021-08-29T03:02:07+00:00 1 Answers 27 views 0

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  1. kimchi2
    0
    2021-08-29T03:03:18+00:00
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    Answer:

    $1,038

    Step-by-step explanation:

    the equation for annual compound interest is y=p(1±r)^t, where p is the principal (starting amount), r is the rate (as a decimal), and t is the number of years (time).

    2.5% as a decimal is 0.025

    We will add that to 1, because when we earn interest, we are gaining money.

    So we will substitute our given numbers into the equation:

    y=6500(1.025)^6

    solve:

    y=$7,5638 (rounded)

    That’s the total amount he earned (principal + interest). To find out how much interest he earned over those 6 years, subtract our new amount from our starting amount

    75638-6500

    $1,038

    So he made $1,038 in interest

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