Simple Interest Calculation
The total amount accrued, principal plus interest, with compound interest on a principal of $560.00 at a rate of 4% per year compounded 12 times per year over 6 years is $711.62.
Answer:
A = $711.62
Given Data
Principal = $560
Rate = 4%
Time = 6 years
Applying the expression for Compound interest
A = P + I where
P (principal) = $560.00
I (interest) = $151.62
Calculation Steps:
First, convert R as a percent to r as a decimal
r = R/100
r = 4/100
r = 0.04 rate per year,
Then solve the equation for A
A = P(1 + r/n)^nt
A = 560.00(1 + 0.04/12)^(12)(6)
A = 560.00(1 + 0.003333333)^(72)
A = $711.62
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