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ryan puts $500 into a bank account. the bank pays 5% compound interest per year. how much is the interest after one year?
 one year ago
 one year ago
ryan puts $500 into a bank account. the bank pays 5% compound interest per year. how much is the interest after one year?
 one year ago
 one year ago

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ParthKohliBest ResponseYou've already chosen the best response.2
Continuous compounding. \( \color{Black}{\Rightarrow 500(1 + 0.05) \large^n }\)
 one year ago

ParthKohliBest ResponseYou've already chosen the best response.2
\(n\textbf{ is the number of years.}\)
 one year ago

ParthKohliBest ResponseYou've already chosen the best response.2
\( \color{Black}{\Rightarrow 500(1.05)^1 }\) \( \color{Black}{\Rightarrow 500 \times 1.05 }\)
 one year ago

ParthKohliBest ResponseYou've already chosen the best response.2
This is compounded interest.
 one year ago

ParthKohliBest ResponseYou've already chosen the best response.2
And yes it is $525 :)
 one year ago

ZhangYanBest ResponseYou've already chosen the best response.1
lol sorry parth read mistake ;)
 one year ago

ParthKohliBest ResponseYou've already chosen the best response.2
Interest = Amount  Principal Interest = 525  500 Interest = 25
 one year ago

sarah_98Best ResponseYou've already chosen the best response.0
work out the total amount he has in his bank account after 2 yrs
 one year ago

ParthKohliBest ResponseYou've already chosen the best response.2
@ZhangYan if it's one year then both simple and compound may apply :) so your answer is correct but not the method :S
 one year ago

sarah_98Best ResponseYou've already chosen the best response.0
work out the total amount he has in his bank account after 2 yrs
 one year ago
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