Problema Solution
Manually calculate the compound interest on an investment of $7,500 at 6% interest, compounded semiannually, for 1 year.
Answer provided by our tutors
beginning for the year: $7,500
after 6 months: 7,500 + 0.06*7,500 = $7,950
after 1 year (12 months): 7,950 + 0.06*7,950 = $8,427
after 1 year the compound amount will be e $8,427.
beginning for the year: $7,500
after 6 months: 7500 + (0.06/2)*7500 = $7,725
after 12 months (1 year): 7725 + (0.06/2)*7725 = $7,956.75
the interest is $7,956.75 - $7,500 = $456.75.