Jennifer lends $2 000 to her friend who is launching a small business. Her friend promises to pay her 9% per year compounding interest. How much interest would Jennifer get at the end of four years?

Question

Quizplus · Accepted Answer

The correct answer is A.The formula for compound interest is A = P(1 + r/n)^(nt), where A is the final amount, P is the principal, r is the annual interest rate, n is the number of times per year that the interest is compounded, and t is the number of years.In this case, P = $2,000, r = 9%, n = 1 (since the interest is compounded annually), and t = 4. Plugging these values into the formula, we get A = 2000(1 + 0.09/1)^(1*4) = $2,823. The interest earned is A - P = $2,823 - $2,000 = $823.

Jennifer Lends $2 000 to Her Friend Who Is Launching