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Adorkable

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.

  • one year ago
  • one year ago

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  1. campbell_st
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    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

    • one year ago
  2. Adorkable
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    Not making much sense

    • one year ago
  3. jim_thompson5910
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    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

    • one year ago
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