Question
Asked Aug 1, 2019
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Use the compound interest formula A = P(1 + i)n to find the indicated values A = $6,000; = 0.03; n = 24; P =?

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Expert Answer

Step 1

Compounded Interest:           

It is the method for computing interest at the initial amount of principal which includes the previous period’s accumulated interest. It can be compounded annually, half-yearly, quarterly and daily. The rate of compounding interest depends on the frequency of compounding.

Step 2

Given,

Amount (A) = $6,000

Interest Rate (i) = 0.03

Number of times compounded (n...

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Amount (A) Principal Amount (P) (1Interest Rate (i)) $6,000 (1 0.03) $6,000 (1.03) $6, 000 2.03279411 = $2951.60

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