Question

Find the compound interest principal 1750 interest rate 2 percent time 20 years

Answer 1

To find the compound interest over a certain period of time we need to apply the following expression:

`M\text{ = P}\cdot(1+r)^t`

Where M is the final value, P is the principal, r is the interest rate divided by 100 and t is the elapsed time in years. Applying the data from the problem gives us:

`\begin{gathered} M\text{ = 950}\cdot(1\text{ + }(6.8)/(100))^(10) \\ M\text{ = 950}\cdot(1+0.068)^(10) \\ M\text{ = 950}\cdot(1.068)^(10)\text{ = }1834.1554 \end{gathered}`

The interest on over the course of these years were:

`\text{interest = 1834.1554 - 1750 = }84.16`