Paul deposited $7,976 into a bank account that earns 2 5/8% compound interest annually. Calculate Paul’s interest and total after 42 months.

Paul’s interest and total after 42 months is $757.16 and $8,733.16 respectively.

Step-by-step explanation:

We are given that Paul deposited $7,976 into a bank account that earns compound interest annually.

Let P = Principal sum of money

     R = Rate of interest p.a.

     T = Time period

     A = Amount of money

    C.I. = Compound Interest

As, we know that amount formula for compound interest is given by;

                                            Or

Now, in the question we are given P = $7,976 , R =  = and T = 42 months.

So,    

       A =  $8733.16

Hence, the total amount of money after 42 months is $8733.16.

Now, Compound Interest is calculated as;

          $8,733.16 = $7,976 + C.I.

           C.I. =  $8,733.16 - $7,976 = $757.16

Therefore, Paul’s interest and total after 42 months is $757.16 and $8,733.16 respectively.

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