Question

Manually calculate the compound interest on an investment of $12,500 at 7.5% interest, compounded semiannually, for 2 years

Answer 1

`A=P(1+ (r)/(n))^(nt)`
A=future amount
P=present amount
r=rate in decima
n=number of times per year compounded
t=time in years

given
P=125000
r=7.5%=0.075
n=2 (semiannualy is 2 times per year)
t=2 years


`A=12000(1+ (0.075)/(2))^((2)(2))`

`A=12000(1+ 0.0375)^(4)`

`A=12000(1.0375)^(2)`
A=14483.13018
round
A=14483.13

total interest earend is 14483.13-125000=1983.13
interst earne dis $1893.13 and amount in bank after 2 years is $14483.13

Answer 2

well...according to my calculator and Apologiabiology's math, i got 4.75, idk if this is correct though