OCDianaOC wrote:
Is that the formula for simple interest?
I'm familiar with the compound interest formula, but never use this formula when the answer choices is an integer... usually, I just repeatedly multiply out... this question is an exception...
Hi
OCDianaOCThis is the formula for compound interest when done yearly
\(A = P*(1 + \frac{r}{100})^{n}\)
where
n - number of years
r - rate of interest
A - Amount realized at the end of n years
P - Principal invested initially
Coming back to this problem
Pat invests x(Principal) at 8%(R) for 5(n) years
Therefore, Amount = x*\((1 + \frac{8}{100})^5\) = x*\((1.08)^5\)
(Option D)
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83% (00:54) correct 
