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Popular Word Problems >

Suppose that 20,000 is invested at 9% interest. Find the amount of money in the account after 8 years if the interest is compounded annually.

Solution

S u pp ose t ha t ​20, 000 i s in v es t e d a t 9​% in t eres t . F in d t h e am o u n t o f m o n ey in t h e a cco u n t a f t er 8 ye a rs i f t h e in t eres t i s co m p o u n d e d ann u a ll y .

Solution

Amount : 39851.25

Solution steps

Translate the problem into an equation:

A = 20000 (1 + \frac{0.09}{1})^{1 \cdot 8}

20000 (1 + \frac{0.09}{1})^{1 \cdot 8} = 39851.25283 \dots

Round to the nearest hundredth:

39851.25

Amount : 39851.25

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