Question

$1 invested for 1 Year at 7.2% compound semiannually

Answer 1

Sum = $1.073

Interest = $0.073

Explanation:

Given that $1 is invested for one year at 7.2% interest which compounds semi-annually.

Semi-annual means there should be two equal intervals in a year i.e. 6 months interval.

Now, the semi-annual rate of interest is
`(7.2)/(2) = 3.6`%.

Therefore, the invested money will become
`1* [1 + (3.6)/(100) ]^(2)`

= $1.073

Therefore, the interest obtained will be $(1.073 - 1) = $0.073. ( Answer )