Compute the amount of compound interest earned in 1 year for an investment of $1,000,000 with a nominal interest rate of 8% compounded quarterly.

Solution:

A=$1,000,000*(1+8%/4)^4 = 1,082,432

I = 1,082,432-$1,000,000 = $82,432

So the amount of compound interest is $82,432