Question

Ghana van company invested P45 700 for two years at a rate of 12%per annum compounded for quarter year. Work out the compound interest over the two years

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Answer 1

`~~~~~~ \textit{Compound Interest Earned Amount} \\\\ A=P\left(1+(r)/(n)\right)^(nt) \quad \begin{cases} A=\textit{accumulated amount}\\ P=\textit{original amount deposited}\dotfill &\$45700\\ r=rate\to 12\%\to (12)/(100)\dotfill &0.12\\ n= \begin{array}{llll} \textit{times it compounds per year}\\ \textit{quarterly, thus four} \end{array}\dotfill &4\\ t=years\dotfill &2 \end{cases}`

`A = 45700\left(1+(0.12)/(4)\right)^(4\cdot 2)\implies A=45700(1.03)^8 \implies A \approx 57891.39 \\\\[-0.35em] ~\dotfill\\\\ \stackrel{\textit{earned interest}}{57891.39~~ - ~~45700} ~~ \approx ~~ \text{\LARGE 12191.39}`