Subjects finance

Compound Interest 094B3A

Step-by-step solutions with LaTeX - clean, fast, and student-friendly.

Use the AI math solver

1. **State the problem:** Noah invests 4000 into a savings account with compound interest of 2.5% per year. We need to find: a) The amount in the account after 9 years. b) The interest earned after 9 years. 2. **Formula for compound interest:** $$A = P \left(1 + \frac{r}{100}\right)^t$$ where: - $A$ is the amount after $t$ years, - $P$ is the principal (initial amount), - $r$ is the annual interest rate (in %), - $t$ is the time in years. 3. **Calculate the amount after 9 years:** Given $P=4000$, $r=2.5$, $t=9$, $$A = 4000 \left(1 + \frac{2.5}{100}\right)^9 = 4000 \left(1 + 0.025\right)^9 = 4000 \times 1.025^9$$ Calculate $1.025^9$: $$1.025^9 \approx 1.2467$$ So, $$A \approx 4000 \times 1.2467 = 4986.8$$ Rounded to the nearest penny: $$A = 4986.80$$ 4. **Calculate the interest earned:** Interest $I = A - P = 4986.80 - 4000 = 986.80$ 5. **Final answers:** a) Amount after 9 years: **4986.80** b) Interest earned after 9 years: **986.80**