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Sagot :
We have in this question a case of Annual Compound Interest. The formula for this case is as follows:
[tex]A=P(1+r)^n_{}_{}[/tex]Where:
A = accrued amount.
P = Principal (starting amount).
r = interest rate.
n = number of years.
We have from the question:
r = 6%
n = 3 years.
P = $4,000.00
A = it is the unknown amount.
We can determine A to then find the interest he earned. Thus, we can proceed as follows:
[tex]A=4000(1+0.06)^3\Rightarrow A=4000(1.06)^3\Rightarrow A=4764.064[/tex]This previous amount is the accrued amount (the starting amount plus the interest after 3 years annually compounded).
Therefore, the amount Vijay earned in interests (after 3 years) is:
[tex]4764.064-4000=764.064[/tex]And, rounding this amount to the nearest cent, we have that, finally, the earned interest (after 3 years) is $764.06.
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