Question

How much interest is earned on an investment of $6000 at 3.5%annual interest after 6 months?

how did my teacher get 105 I need help

Answer 1

Here we have to use compound interest formula for half year.

6 months = 1/2 years

Amount =
`P(1 + (r/2)/(100))^2n`

R = Rate

P = Principle

n = number of years

Here P = 6000, r/2 = 3.5/2 = 1.75, n = 1/2

Plug in the given values into the formula, we get

A = 6000(1 + 1.75/100)^2(1/2)

A = 6000(1 + 0.0175)^1

A = 6000(1.0175)

A = $6105

Compound interest = A - P

= $6105 - $6000

Interest = $105

Thank you :)