SOLUTION: Manually calculate the compound interest on an investment of $12,500 at 7.5% interest, compounded semiannually, for 2 years. (Round value to the nearest cent.)

Question 885940: Manually calculate the compound interest on an investment of $12,500 at 7.5% interest, compounded semiannually, for 2 years. (Round value to the nearest cent.)

Answer by lwsshak3(11628) (Show Source): You can put this solution on YOUR website!
Manually calculate the compound interest on an investment of $12,500 at 7.5% interest, compounded semiannually, for 2 years. (Round value to the nearest cent.)
***
compound interest formula: A=P(1+i)^n,P=initial investment, i=interest rate per compounding period, n=number of periods, A=amt after n-periods
..
For given problem:
P=12500
i=.075/2=0.0375
n=4
..
A=12500(1+.0375)^4
A=12500(1.0375)^4=14483.13
amt gained-initial investment=14483.13-12500.00=1983.13
Compound Interest=$1,983.13

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