Question

Use the formula for compound amount to find the interest amount:$14,800 at 6% compounded semiannually for 4 years

Answer 1

Step 1:

Write the compound interest formula

`\begin{gathered} \text{Amount = P( 1 + }(r)/(n))^(nt) \\ \text{For seniannually, n = 2} \\ P\text{ = \$14800} \\ r=\text{ 6\% = 0.06} \\ \text{Time t = 4 years} \end{gathered}`

Step 2:

Substitute the values in the formula

`\begin{gathered} P\text{ = 14800 }*\text{ ( 1 + }(0.06)/(2))^(2*4) \\ P\text{ = 14800 }*\text{ ( 1 + }0.03)^8 \\ P\text{ = 14800 }*1.03^8 \\ P\text{ = 18748.2} \end{gathered}`