Answer:
≈ $937
Step-by-step explanation:
to answer this, we have to use the compound interest formula which is:
A = P(1 + r/n)^nt
the meanings of each variable are:
A = result
P = principal amount
r = rate (in decimal form)
n = the number of compound periods (eg: annually, quarterly, etc)
t = time
in the word problem, we need to solve for A. we are given P, r, n, and t.
P = 800
r = 0.02 also known as 2%
n = 1 keyword being annually which is equal to the value of 1
t = 8
we can plug these values into the formula:
A = 800(1 + 0.02/1)[tex]^(^1^)^(^8^)[/tex]
we can use a calculator to calculate this easier but ill break it down:
A = 800(1 + 0.02/1)[tex]^8[/tex]
A = 800(1.02)[tex]^8[/tex]
A = 800(1.02)[tex]^8[/tex]
A = 800(1.17165938)
A ≈ 937.327
we can round 937.327 to the nearest dollar which is $937
Carl would have earned $937 over the course of 8 years
