If 8000 dollars is invested in a bank account at an interest rate of 10 per cent per year, find the amount in the bank after 15 years if interests is compounded annually
To find the amount in the bank after 15 years with interest compounded annually, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the amount in the bank after time t
P = the principal amount (initial investment), which is $8000 in this case
r = the annual interest rate (expressed as a decimal), which is 10% or 0.10 in this case
n = the number of times that interest is compounded per year, which is 1 (annually) in this case
t = the number of years, which is 15 in this case
Plugging these values into the formula:
A = 8000(1 + 0.10/1)^(1*15)
A = 8000(1 + 0.10)^(15)
A = 8000(1.10)^(15)
A = 8000(1.949)
A = $15,592
The amount in the bank after 15 years, with interest compounded annually, is $15,592.