document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=881267>Question 881267</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Terry is confused about the various compounding periods offered by his bank. If he deposits $6000 into an investment for one year at 5% per year, how much more interest will he earn by compounding semi-annually instead of annually? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #532082 by </B><A HREF=/tutors/aboutme.mpl?userid=JulietG><B>JulietG(1812)</B></A><img src=\"/images/stars/stars-12.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=JulietG><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=JulietG><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=532082\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> If he compounds annually, it will only be once.<BR>\n" );
document.write( "$6000 * .05 = $300 --> $6300 total<BR>\n" );
document.write( "If he compounds semi-annually at the same rate, he'll compound twice at 2.5% each.<BR>\n" );
document.write( "$6000 * .025 = $150.<BR>\n" );
document.write( "The difference will be in the second payout.  It will pay $6150 * .025, or $153.75, for a total of $6303.75.<BR>\n" );
document.write( ".<BR>\n" );
document.write( "It might not seem like much, but most credit card companies compound DAILY, so you end up paying interest on the interest of the interest. </SPAN>\n" );
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