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P(1+r)t Using the expression above, choose the correct answers for the new balance and the amount of interest earned in the following compound interest problem. $950 at 7% for 8 years, compounded annually. Total Amount = $ Interest Amount = $

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mathmate
The formula is:
Future value = accumulated amount, F = P(1+r)^t
P=principal
r=annual interest rate [compounded annually]
t=number of years of loan
 
Given: 
P=950
r=0.07
t=8

F=950(1.07)^8
= 1632.28 (total amount)

Interest = total amount - principal
=1632.28 - 950
=682.28

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