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Find the future value in interest earned if $8704.56 is invested for eight years at 4% compounded semiannually

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asuwafohjames

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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