Question

Nate opened a savings account and deposited $1,000.00 as principal. the account earns 11% interest compounded annually. how much interest will he earn after 7 years

Answer 1

In this case, we'll have to carry out several steps to find the solution.

Step 01:

Data

interest = 11% = 0.11

n = time = 7 years

C = initial capital = $1000

M = final capital = ?

Money earned in interest = ?

Step 02:

M = C ( 1 + i ) ^ n

`M\text{ = 1000}\cdot(1+0.11)^7`

M = 1000 * (2.076)

M = 2076.16

Money earned in interest = M - C

= 2076.16 - 1000

= 1076.16

The answer is:

The money earned in interest is $1076.16 .