Question

Which of the following statements could be represented to find the amount annum after 2 years if the interest is compounded annually?A = 6250 (1.16)2Amount on $6250 at 16% per annum.Amount on $6250 at 1.6% per annum.Amount on $6250 at 6% per annum.Amount on $6250 at 0.16% per annum.

Answer 1

Solution:

Given;

$A=6250(1.16)^2$

Where;

$\begin{gathered} A=P(1+r)^t \\ \\ P=6250,r=16\text{ \%},t=2 \end{gathered}$

CORRECT ANSWER: Amount on $6250 at 16% per annum