Albert invested the amount of $8,000 in a fixed deposit for 2 years at a compound interest rate of 5% per annum. How much will Albert get on the maturity of the fixed deposit?A. $8510B. $8620C. $8730D.$8820

Accepted Solution

Answer:Option D.$8820Step-by-step explanation:we know that    The compound interest formula is equal to  [tex]A=P(1+\frac{r}{n})^{nt}[/tex]  where  A is the Final Investment Value  P is the Principal amount of money to be invested  r is the rate of interest  in decimal t is Number of Time Periods  n is the number of times interest is compounded per year in this problem we have  [tex]t=2\ years\\ P=\$8,000\\ r=5\%=5/100=0.05\\n=1[/tex]  substitute in the formula above  [tex]A=8,000(1+\frac{0.05}{1})^{1*2}[/tex]  [tex]A=8,000(1.05)^{2}[/tex]  [tex]A=\$8,820[/tex]