Tiana invests $83,927 in a start-up company. She will be repaid at the end of 7 years at 7% interest compounded annually. Find the amount of interest she willearn on this invest…

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asked Feb 7, 2023 186k views

1 Answer

Abhig · Answer 1 · 2023-02-12T08:03:20+0000

For a initial amount invested P at a annual interest rate r, the total amount after n years is given by:

$A=P\cdot(1+r)^n$

For P = $83927, r = 0.07 and n = 7, we have:

$\begin{gathered} A=83927\cdot1.07^7 \\ A=\text{ \$134768.422} \end{gathered}$

Then, the amount of interest Tiana will earn on this investment is given by:

$A-P=134768.422-83927=\text{ \$50841}$