anonymous
  • anonymous
ryan puts $500 into a bank account. the bank pays 5% compound interest per year. how much is the interest after one year?
Mathematics
  • Stacey Warren - Expert brainly.com
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SOLVED
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chestercat
  • chestercat
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ParthKohli
  • ParthKohli
Continuous compounding. \( \color{Black}{\Rightarrow 500(1 + 0.05) \large^n }\)
ParthKohli
  • ParthKohli
\(n\textbf{ is the number of years.}\)
anonymous
  • anonymous
ok

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ParthKohli
  • ParthKohli
\( \color{Black}{\Rightarrow 500(1.05)^1 }\) \( \color{Black}{\Rightarrow 500 \times 1.05 }\)
anonymous
  • anonymous
$525?
anonymous
  • anonymous
is it?
ParthKohli
  • ParthKohli
This is compounded interest.
anonymous
  • anonymous
im confused :s
ParthKohli
  • ParthKohli
And yes it is $525 :)
anonymous
  • anonymous
oh ok there's part 2
anonymous
  • anonymous
lol sorry parth read mistake ;)
ParthKohli
  • ParthKohli
Interest = Amount - Principal Interest = 525 - 500 Interest = 25
anonymous
  • anonymous
work out the total amount he has in his bank account after 2 yrs
ParthKohli
  • ParthKohli
@ZhangYan if it's one year then both simple and compound may apply :) so your answer is correct but not the method :S
anonymous
  • anonymous
work out the total amount he has in his bank account after 2 yrs

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