Subjects finance

Compound Interest 7Cccca

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1. **State the problem:** Adwoa invested 1200 at 10% per annum compound interest for 2 years. We need to find: a. The amount at the end of 2 years b. The compound interest earned 2. **Formula for compound interest:** The amount $A$ after $t$ years with principal $P$, rate $r$ (as a decimal), compounded annually is: $$A = P(1 + r)^t$$ The compound interest $CI$ is: $$CI = A - P$$ 3. **Given values:** $P = 1200$ $r = 10\% = 0.10$ $t = 2$ 4. **Calculate the amount $A$:** $$A = 1200(1 + 0.10)^2 = 1200(1.10)^2$$ $$A = 1200 \times 1.21 = 1452$$ 5. **Calculate the compound interest $CI$:** $$CI = A - P = 1452 - 1200 = 252$$ **Final answers:** a. Amount after 2 years is $1452$ b. Compound interest earned is $252$