Answer:
Step-by-step explanation:
We would apply the formula for determining compound interest which is expressed as
A = P(1+r/n)^nt
Where
A = total amount in the account at the end of t years
r represents the interest rate.
n represents the periodic interval at which it was compounded.
P represents the principal or initial amount deposited
From the information given,
P = $1000
r = 12% = 12/100 = 0.12
n = 1 because it was compounded once in a year.
t = 25 years
Therefore,.
A = 1000(1 + 0.12/1)^1 × 25
A = 1000(1.12)^25
A = $17000
If the number of compounding periods increases, the amount of compound interest would be greater.
