What will be the compound interest on $1500 for 4 years at a rate of 10% per ann

What will be the compound interest on $1500 for 4 years at a rate of 10% per annum?

What will be the compound interest on $1500 for 4 years at a rate of 10% per annum?

Correct Answer: $696.15

Step 1: Identify the principal amount (P), which is $1500.
Step 2: Identify the rate of interest (r), which is 10% per annum. Convert this to decimal form: 10% = 0.10.
Step 3: Identify the number of years (n), which is 4 years.
Step 4: Use the formula for compound interest to find the total amount (A): A = P(1 + r)^n.
Step 5: Substitute the values into the formula: A = 1500(1 + 0.10)^4.
Step 6: Calculate (1 + 0.10) = 1.10.
Step 7: Raise 1.10 to the power of 4: (1.10)^4 = 1.4641.
Step 8: Multiply this result by the principal: A = 1500 * 1.4641 = $2196.15.
Step 9: Calculate the compound interest (CI) by subtracting the principal from the total amount: CI = A - P = 2196.15 - 1500.
Step 10: The compound interest is CI = $696.15.

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