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Compound Interest You invest $750 at 6% per annum compounded annually. Determine how much the interest is earned in the first year. Answer :$45 Determine how much more interest is earned in the second year? Please answer and explain.
ok, the interest in the 1st year is 6% of $750 so I = 750 * 0.06 for the 2nd year add the interest and principal so I = ( Interest + Principal)* 0.06 hope this makes sense
Not making much sense
You earn $45 in interest in the first year. So you add that to the balance to get 750+45 = 795 This is your new balance going into year 2 You now use the formula I = Prt where P = 795, r = 0.06 and t = 1 to find the interest you earn for year #2