Given Information:
Principle amount = P = $6,000
Interest rate = r = 4% = 0.04
Period in years = t = 5
Required Information:
How much interest will he earn in 5 years = ?
Answer:
Amount of interest = $1,299.92
Step-by-step explanation:
Using the formula given in the question,
[tex]B = P(1 + r )^{t}[/tex]
Where B is the final amount, P is the initial amount, r is the interest rate and t is the number of years
[tex]B = P(1 + r )^{t}\\\\B = 6,000(1 + 0.04)^{5}\\\\B = 7,299.92[/tex]
The amount of interest earned is
[tex]Amount \:of\: interest = B - P \\\\Amount \:of \:interest = 7,299.92 - 6,000\\\\Amount \:of \:interest = 1,299.92[/tex]
Therefore, Quincy has earned $1,299.92 in terms of interest by investing $6,000 in a savings account at the rate of 4% annual interest for a period of 5 years.
