a man deposits $8000 in his bank account.if the bank pays 8% compoud intrest per annum,what will be his total intrest after 3 years
the formula is
interest = prt
The compound interest formula is:
A = P(1+r/n)^nt
P = principal amount (the initial amount you borrow or deposit)
r = annual rate of interest (as a decimal)
t = number of years the amount is deposited or borrowed for.
A = amount of money accumulated after n years, including interest.
n = number of times the interest is compounded per year
8000(1+.08)^1*3
Source:
depaul
8000(1+.08)^1*3
= 8000(1.08)^3
= 10077.70
Chopsticks is right. It is compounded annually. PRT is no compounding.
To calculate the total interest after 3 years, you will need to use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the total amount (including the initial deposit and interest)
P = the principal amount (the initial deposit)
r = the annual interest rate (as a decimal)
n = the number of times interest is compounded per year
t = the number of years
In this case:
P = $8000 (the initial deposit)
r = 8% or 0.08 (as a decimal)
n = 1 (compounded annually)
t = 3 (years)
Substituting these values into the formula, we get:
A = $8000(1 + 0.08/1)^(1*3)
Simplifying further:
A = $8000(1 + 0.08)^3
A = $8000(1.08)^3
Calculating:
A ≈ $8000 * 1.2597
A ≈ $10,077.60
Thus, the total interest after 3 years would be approximately $2,077.60.