12. a students parents invested $8,500 in a college savings account that pays 5.7% interest compounded…

12. a students parents invested $8,500 in a college savings account that pays 5.7% interest compounded annually. no additional deposits or withdrawals will be made. what is the amount of interest earned on the account at the end of 12 years?

12. a students parents invested $8,500 in a college savings account that pays 5.7% interest compounded annually. no additional deposits or withdrawals will be made. what is the amount of interest earned on the account at the end of 12 years?

Answer

Explanation:

Step1: Identify compound - interest formula

The compound - interest formula is $A = P(1 + r)^t$, where $P$ is the principal amount, $r$ is the annual interest rate (in decimal form), and $t$ is the number of years. Here, $P=$8500$, $r = 0.057$ (since $5.7%=0.057$), and $t = 12$.

Step2: Calculate the amount $A$

$A=8500\times(1 + 0.057)^{12}$. First, calculate $(1 + 0.057)^{12}$. Using a calculator, $(1.057)^{12}\approx2.0577$. Then $A = 8500\times2.0577=$17490.45$.

Step3: Calculate the interest earned

The interest earned $I=A - P$. So $I=17490.45−8500=$8990.45$.

Answer:

$8990.45$