Math problem on compound interest

Question

Calculate the compound interest and the amount accruing when $ 10 000 is invested at 8% per
annum for 3 years.

Answer 1

The Compound Interest Formula is: A = P(1+^r/_n)^nt

Where:

A = Final Amount

P = Principle (Starting Amount)

r = Interest Rate (as a decimal)

n = number of compounds per year

t = time in years

 

In this case, 

P = 10,000

r = 0.08

n = 1

t = 3

 

A = 10,000(1+^0.08/₁)^(1*3)

A = 10,000(1+.08)³

A = 10,000(1.08)³

A = 10,000(1.259712)

A = 12,597.12

Answer 2

for compound interest here you want to use

A = P(1 + r)^t

in this scenario that means taking

A = 10000(1 + 0.08)^3

A = 10000(1.08)^3

A = 12597.12

so that is the final amount of the investment and then the interest amount you can find by subtracting the principal

Interest = Amount - Principal

Interest = 12597.12 - 10000

Interest = 2597.12