Question

12000 is compounded semi-annually at a rate of 10% for 21 years what is the total amount in the compound interest

Answer 1

We will use the formula;

`A=P(1+(r)/(n))^{nt^{}}`

Where A is the amount after t years

n is the number of times the interest is paid

r is the rate

t is the time in years

p is the pricipal or the initial amount

From the question;

P= 12 000

r = 10% = 0.1

t = 21

n= 2, since it is compounded semi-anually

Substitute the values into the formula;

`A=12\text{ 000 (1 + }(0.1)/(2))^(2*21)`
`A=12000(1+0.05)^(42)`

`A=12000(1.05)^(42)`
`A=93139.05`

Hence, the total amount is $93139.05 to the nearest cent