Exercise 8 Page 351

Compound interest is the interest earned on the principal and on previously earned interest. Let's recall the formula that gives the balance $y$ of an account earning compound interest. In this formula, $P$ is the principal or initial amount, $r$ is the annual interest rate written in decimal form, $t$ is the time in years, and $n$ is the number of times the interest is compounded in one year. Let's pay close attention to the given exercise.