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Manually calculate the compound interest on an investment of $12,500 at 7.5% interest, compounded semiannually, for 2 years

Respuesta :

well...according to my calculator and Apologiabiology's math, i got 4.75, idk if this is correct though
apologiabiology
[tex]A=P(1+ \frac{r}{n})^{nt} [/tex]
A=future amount
P=present amount
r=rate in decima
n=number of times per year compounded
t=time in years

given
P=125000
r=7.5%=0.075
n=2 (semiannualy is 2 times per year)
t=2 years

[tex]A=12000(1+ \frac{0.075}{2})^{(2)(2)} [/tex]
[tex]A=12000(1+ 0.0375)^{4} [/tex]
[tex]A=12000(1.0375)^{2} [/tex]
A=14483.13018
round
A=14483.13

total interest earend is 14483.13-125000=1983.13
interst earne dis $1893.13 and amount in bank after 2 years is $14483.13