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sarah_98
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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?
 2 years ago
 2 years ago
sarah_98 Group Title
ryan puts $500 into a bank account. the bank pays 5% compound interest per year. how much is the interest after one year?
 2 years ago
 2 years ago

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

ParthKohli Group TitleBest ResponseYou've already chosen the best response.2
\(n\textbf{ is the number of years.}\)
 2 years ago

ParthKohli Group TitleBest ResponseYou've already chosen the best response.2
\( \color{Black}{\Rightarrow 500(1.05)^1 }\) \( \color{Black}{\Rightarrow 500 \times 1.05 }\)
 2 years ago

ParthKohli Group TitleBest ResponseYou've already chosen the best response.2
This is compounded interest.
 2 years ago

sarah_98 Group TitleBest ResponseYou've already chosen the best response.0
im confused :s
 2 years ago

ParthKohli Group TitleBest ResponseYou've already chosen the best response.2
And yes it is $525 :)
 2 years ago

sarah_98 Group TitleBest ResponseYou've already chosen the best response.0
oh ok there's part 2
 2 years ago

ZhangYan Group TitleBest ResponseYou've already chosen the best response.1
lol sorry parth read mistake ;)
 2 years ago

ParthKohli Group TitleBest ResponseYou've already chosen the best response.2
Interest = Amount  Principal Interest = 525  500 Interest = 25
 2 years ago

sarah_98 Group TitleBest ResponseYou've already chosen the best response.0
work out the total amount he has in his bank account after 2 yrs
 2 years ago

ParthKohli Group TitleBest 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
 2 years ago

sarah_98 Group TitleBest ResponseYou've already chosen the best response.0
work out the total amount he has in his bank account after 2 yrs
 2 years ago
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