Emelina Deposit $260 into a savings account seven years ago the account earns 8.5% interest compounded annually how much interest has she earned
Accepted Solution
A:
Answer:The interest which she has earned is $200.226 Step-by-step explanation:Given as :The principal deposited in account = $260The time period = 7 yearsThe interest earn 8.5% compounded annually Let The amount after 7 years = A So , From compounded method Amount = Principal × [tex](1+\frac{Rate}{100})^{Time}[/tex]Or, Amount = $260 × [tex](1+\frac{8.5}{100})^{7}[/tex]Or, Amount = $260 × [tex](1.085)^{7}[/tex] Or, Amount = $260 × 1.7701 ∴ Amount = $460.226 Now, Compound Interest added = Amount - Principalor, CI = $460.226 - $260∴ CI = $200.226Hence The interest which she has earned is $200.226 Answer