What Is The Compound Interest On A Deposit At 12% Compounded Semiannually For 10 Years?


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Anonymous answered
What is the deposit? How will you calculate the compound interest without knowing the deposit amount?

The formula for calculating compound interest is >>>>

M = P( 1 + I )^n


M is the final amount including the principal.
P is the principal amount.
I is the rate of interest per year.
N is the number of years invested

In your question, you haven't mention the Principal amount. Use my above given method to calculate compound interest.

Lets say the amount is $700

m = 700(1+0.12)^10 = 2174.09

This way you can solve the problem.
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Anonymous commented
If the interest rate is at 12% compounded semianually then you would have to divide 12% by the number of subperiods per year. Doing this you would get 12%/2 which will equal 6%. N would be the number of subperiods you have, which 2*10=20. The formula would then be
700(1+.06)^20= 2244.99

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