The future value interest earned semiannually at a compound rate of 4% is $7598.89.
To calculate the future value in interest earned, we use the of compound interest
What is compound interest?
Compound interest is the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods.
Formula:
- I = [P(1+r/100)ⁿ-P]...................... Equation 1
Where:
- I = Future interest
- P = Principle
- R = Rate
- n = Total time
From the question,
Given:
- P = $8704.56
- r = 4%
- n = 2×8 = 16 semiannually
Substitute the values above into equation 1
- I = [8704.56(1+4/100)¹⁶-8704.56]
- I = 8704.56(1.04)¹⁶-8704.56
- I = 16303.48-8704.56
- I = $7598.89
Hence, the future value interest earned is $7598.89.
Learn more about compound interest here: https://brainly.com/question/24924853
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