Ask Question
14 October, 12:49

Precision engineering invested $125,000 at 6 percent interest, compounded annually for 3 years. how much interest on interest did the company earn over this period of time?

+2
Answers (1)
  1. 14 October, 13:18
    0
    The future amount of the current investment/credit with interest that is compounded annually can be calculated through the equation,

    F = P x (1 + r) ^n

    where F is the future amount, P is the principal, r is the decimal equivalent of the given rate, and n is the number of years.

    Substituting the known values,

    F = ($125,000) x (1 + 0.06) ^3 = $148,877

    The interest is therefore,

    I = $148,877 - $125,000 = $23,877
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Precision engineering invested $125,000 at 6 percent interest, compounded annually for 3 years. how much interest on interest did the ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers