The correct equation for how much Madeline will have after [tex]8[/tex] years will be [tex]25000(1+0.095)^8[/tex] which is in option [tex](b)[/tex].
What is compound interest ?
Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on principal plus interest
Amount [tex]=P(1+\frac{R}{100})^t[/tex]
We have,
Principal [tex]=\$25,000[/tex]
Rate[tex]=9.5\%[/tex]
Time [tex]=8[/tex] years
Now,
Using the above mentioned formula,
Amount [tex]=P(1+\frac{R}{100})^t[/tex]
[tex]=25000(1+\frac{9.5}{100})^8[/tex]
Amount [tex]=25000(1+0.095)^8[/tex]
So, the equation for final amount is [tex]25000(1+0.095)^8[/tex].
Hence, we can say that the correct equation for how much Madeline will have after [tex]8[/tex] years will be [tex]25000(1+0.095)^8[/tex] which is in option [tex](b)[/tex] .
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