Answer:
901.22
Step-by-step explanation:
It is given that,
Principal = 2500
Rate of interest = 8% = 0.08 compounded annually.
No. of times interest compounded in a period = 1
Time is 4 years.
Formula for amount is
[tex]A=P(1+\dfrac{r}{n})^{nt}[/tex]
where, P is principal, r is rate of interest, n is number of times interest compounded in period and t is number of years.
Substitute P=2500, r=0.08, n=1 and t=4 in the above formula.
[tex]A=2500(1+\dfrac{0.08}{1})^{1(4)}[/tex]
[tex]A=2500(1.08)^{4}[/tex]
[tex]A\approx 3401.22[/tex]
So, the compound interest is
[tex]C.I.=A-P[/tex]
[tex]C.I.=3401.22-2500[/tex]
[tex]C.I.=901.22[/tex]
Therefore, the compound interest is 901.22.
