Answered

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How much interest in dollars is earned in 5 years on $8,200 deposited in an account paying 6% interest compounded semiannually round to the nearest cent

Sagot :

Using compound interest formula:

[tex]A=P(1+\frac{r}{n})^{nt}[/tex]

Where:

A = Amount

P = Principal = 8200

r = Interest rate = 6% = 0.06

n = Number of times interest is compounded per year = 2

t = time = 5

so:

[tex]\begin{gathered} A=8200(1+\frac{0.06}{2})^{2\cdot5} \\ A=11020.11 \end{gathered}[/tex]

Therefore, the interest is the amount minus the amount invested:

[tex]\begin{gathered} I=A-P \\ I=11020.11-8200 \\ I=2820.11 \end{gathered}[/tex]

Answer:

$2820.11

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