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Suppose Lisa places $8500 in an account that pays 16% interest compounded each year. Assume that no withdrawals are made from the account.

Follow the instructions below. Do not do any rounding.

(a) Find the amount in the account at the end of 1 year.

(b) Find the amount in the account at the end of 2 years.

Respuesta :

You can use the compounded formula.
[tex] A = P(1 + \frac{r}{n})^{nt} [/tex]

A = total amount 
P = principal or amount of money deposited,
r = annual interest rate 
n = number of times compounded per year
t = time in years

[tex] A = 8500(1 + \frac{.16}{1})^{1\times1} [/tex]   <------ First Year

[tex] A = 8500(1 + \frac{.16}{1})^{1\times2} [/tex]   <-----Second Year

A = $9860           <----First Year

A = $11,437.60   <----Second Year

(a) The amount in the account at the end of 1 year is $9,860.

(b) The amount in the account at the end of 2 year is $11,437.60.

Given that,

  • Lisa places $8500 in an account that pays 16% interest compounded each year.
  • We have to determine the amount for 1 year and 2 year.

Based on the above information, the calculation is as follows:

(a)

The amount is

[tex]= $8,500 \times (1 + 0.16)^1[/tex]

= $9,860

(b)

The amount is

[tex]= $,8500 \times (1 + 0.16)^2[/tex]

= $11,437.60

Therefore we can conclude that the above are the answers:

Learn more: brainly.com/question/13024617

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