Answer:
The interest earned will be $2362.92.
Explanation:
The compound interest amount function is A = P(1 + r/n)^(nt), where
P is the original principal, r is the interest rate as a decimal fraction, n is the number of compounding periods per year, and t is the number of years.
In this particular problem, the formula becomes:
A = $3979(1 + 0.12/2)^(2*4), where 2 represents the number of compounding periods if compounding occurs semiannually.
Evaluating this expression, we get:
A = $3979(1+0.06)^8, or
A = $3979(1.06)^8, or
A = $3979(1.594), or
A = $6341.92 (rounded off to the nearest cent)
The interest will be $6341.92 less the original principal, $3979:
I = $6341.92 - $3979 = $2362.92