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Compare the investment below to an investment of the same principal at the same rate compounded annually.
principal: $5,000, annual interest: 8%, interest periods: 2, number of years: 19


Sagot :

[tex]~~~~~~ \textit{Compound Interest Earned Amount} \\\\ A=P\left(1+\frac{r}{n}\right)^{nt} \quad \begin{cases} A=\textit{accumulated amount}\\ P=\textit{original amount deposited}\dotfill &\$5000\\ r=rate\to 8\%\to \frac{8}{100}\dotfill &0.08\\ n= \begin{array}{llll} \textit{times it compounds per year}\\ \textit{semiannually, thus twice} \end{array}\dotfill &2\\ t=years\dotfill &19 \end{cases} \\\\\\ A=5000\left(1+\frac{0.08}{2}\right)^{2\cdot 19}\implies A\approx 22194.067 \\\\[-0.35em] ~\dotfill[/tex]

[tex]~~~~~~ \textit{Compound Interest Earned Amount} \\\\ A=P\left(1+\frac{r}{n}\right)^{nt} \quad \begin{cases} A=\textit{accumulated amount}\\ P=\textit{original amount deposited}\dotfill &\$5000\\ r=rate\to 8\%\to \frac{8}{100}\dotfill &0.08\\ n= \begin{array}{llll} \textit{times it compounds per year}\\ \textit{annually, thus once} \end{array}\dotfill &1\\ t=years\dotfill &19 \end{cases} \\\\\\ A=5000\left(1+\frac{0.08}{1}\right)^{1\cdot 19}\implies A\approx 21578.505[/tex]

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