Subjects finance

Compound Interest B7885E

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

Use the AI math solver

1. **Stating the problem:** Alexandra invests 4000 into a savings account with compound interest of 3.5% per year. We want to find: a) The amount of money in the account after 6 years. b) The interest earned after 6 years. 2. **Formula used:** The compound interest formula is: $$A = P \left(1 + \frac{r}{100}\right)^t$$ 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 6 years:** Given $P=4000$, $r=3.5$, $t=6$: $$A = 4000 \left(1 + \frac{3.5}{100}\right)^6 = 4000 \left(1 + 0.035\right)^6 = 4000 \times 1.035^6$$ Calculate $1.035^6$: $$1.035^6 \approx 1.23144$$ So: $$A \approx 4000 \times 1.23144 = 4925.76$$ 4. **Calculate the interest earned:** Interest $I = A - P = 4925.76 - 4000 = 925.76$ 5. **Final answers:** a) Alexandra will have approximately **4925.76** in the account after 6 years. b) The interest earned after 6 years is approximately **925.76**.