Question

Find the interest earned given the following:Amount needed: $14,500Time in years: 3 1/2Interest: 8%Compounded: quarterly

Answer 1

To find the interest on the given sum compounded quarterly:

We will use the formula to obtain A (The amount that the sum will yield) first

`\begin{gathered} A=P(1+(r)/(100n))^(nt) \\ \text{where} \\ P=14,500 \\ r=8 \\ t=3.5 \\ n=4 \end{gathered}`

Thus

`A=14500(1+(8)/(100*4))^(4*3.5)`

Hence,

`A=\text{ \$19132.44}`

Thus, the interest will be

`\begin{gathered} \text{Interest}=A-P \\ \text{Interest}=19132.44-14500 \\ \text{Interest}=\text{ \$4632.44} \end{gathered}`

Thus, the interest is $4632.44