Problema Solution
Manually calculate the compound amount and compound interest for the following investment.
Principal Time
Period (years) Nominal
Rate (%) Interest
Compounded Compound
Amount Compound
Interest
Principal Time Period (years) Rate (%)
$8,000 3 8 semiannually
Compound
Amount Compound interest
$ $
Answer provided by our tutors
Beginning of the year: $8,000
After 6 months: 8000 + (0.08/2)*8000 = $8,320
After 12 months (1 year): 8,320 + (0.08/2)*8,320= $8,652.8
After 18 months: 8,652.8 + (0.08/2)*8,652.8 = $8,998.912
After 24 months (2 years): 8,998.912 + (0.08/2)*8,998.912 = $9,358.86848
After 30 months: 9,358.86848 + (0.08/2)*9,358.86848 = $9,733.22322
After 36 months (3 years): 9,733.22322 + (0.08/2)*9,733.22322 = $10,122.5521
The compound interest is: 10,122.5521 - 8,000 = $2,122.55215.