Question

Find the total amount in the compound interest account. $8000 is compounded semiannually at a rate of 8% for 21 years. (Round to the nearest cent.) ​

Answer 1

The total amount in the compound interest account with a principal of $8000, compounded semiannually at an 8% rate over 21 years, is approximately $38,413.60 after rounding to the nearest cent.

Step-by-step explanation:

To find the total amount in a compound interest account, we use the formula A = P(1 + r/n)^(nt), where A is the future value of the investment/loan, including interest, P is the principal investment amount (the initial deposit or loan amount), r is the annual interest rate (decimal), n is the number of times that interest is compounded per year, and t is the number of years the money is invested or borrowed for.

In this case, we are starting with a principal amount of $8000, an annual interest rate of 8% (or 0.08 in decimal form), compounded semiannually (meaning n = 2), over a period of 21 years.

Step-by-step calculation:

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After rounding to the nearest cent, the total amount in the compound interest account after 21 years will be approximately $38,413.60.