principal 224000,rate of interest 2%, time 16 years,what is compound interest.
224000(1.02^16 - 1)
A = P ( 1 + r / n ) ^ ( n * t )
A = total amount
P = principal or amount of money deposited,
r = annual interest rate
n = number of times compounded per year
t = time in years
In this case :
P = 224000
R = 2 % = 2 / 100 = 0.02
n = 1
t = 16
A = P ( 1 + r / n ) ^ ( n * t )
A = P ( 1 + r / 1 ) ^ ( 1 * t )
A = P ( 1 + r ) ^ t
A = 224000 ( 1 + 0.02 ) ^ 16
A = 224000 * 1.02 ^ 16
A = 224000 * 1.37278571
A = 307503.99904
A = 307504
To calculate compound interest, you can use the following formula:
A = P(1 + r/n)^(nt)
Where:
A = the final amount (including both the principal and compound interest)
P = the principal amount (in this case, $224,000)
r = the annual interest rate (expressed as a decimal, in this case, 2% or 0.02)
t = the number of years the interest is applied for (in this case, 16 years)
n = the number of times the interest is compounded per year (this is not specified, so let's assume it is compounded annually)
Plugging in the values:
A = 224000(1 + 0.02/1)^(1*16)
A = 224000(1 + 0.02)^(16)
A = 224000(1.02)^16
Using a calculator or a spreadsheet, we can evaluate the expression:
A = 224000(1.02)^16
A ≈ 322,665.59
Therefore, the compound interest on a principal amount of $224,000, with an interest rate of 2% and a time period of 16 years, is approximately $98,665.59.