Question

Compound Amount

Abraham ace invested $200,000 at 14% interest compounded semi-annually for 8 years. What is the amount of compound interest Abraham earned.

Answer 1

$Principal = 200,000$

$Amount=p(1+R/n)$^nt

P-rincipal

R-interest rate.

n-number of times interest applied per time period.

nt-number of time periods elapsed.

$A=200,000(1+0.14/2)$^2*8

$=200,000(2.952163749)$

$$590,432.7497$

Compound interest

$=590,432.7497-200,000$

=$390,432.7497