If $P is invested for n years at rate i (as a decimal), compounded annually, the future value that accrues is given by , and the interest earned is Find I for the given P, n, and i. Round your answer to two decimal places. $1800 for 5 years at 10%.
A) $2898.92
B) $835.38
C) $1062.88
D) $1098.92
E) $4698.92

Question

If $P is invested for n years at rate i (as a decimal), compounded annually, the future value that accrues is given by , and the interest earned is Find I for the given P, n, and i. Round your answer to two decimal places.   $1800 for 5 years at 10%.
A) $2898.92 
B) $835.38 
C) $1062.88 
D) $1098.92 
E) $4698.92

Quizplus · Accepted Answer

Using the formula for compound interest, we have:

$FV = P(1+i)^n = 1800(1+0.1)^5 = 2898.92$

Interest earned is simply the difference between the future value and the initial principal:

Interest earned = $2898.92 - $1800 = $1098.92

Therefore, the value of I is $1098.92.

If $P Is Invested for N Years at Rate I