Question

Using the chart above, find the total amount and amount of interest paid in the following compound interest problems.

$900 at 6%, for 10 years.

Answer 1

Answer:

Annually: Total Amount = 1611.76, Interest Amount = 711.76

Semiannually: Total Amount = 1625.50 , Interest Amount = 725.50

Quarterly: Total Amount = 1632.62 , Interest Amount = 732.62

Step by Step Explanation:

We can see from the table that the factor that we need to multiply with 900 in order to get amount for compounded annually is 1.7908477. Therefore, our total amount is 1.7908477*900 = 1611.76 and interest earned is 1611.76-900 = 711.76.

The factor that we need to multiply with 900 in order to get amount for compounded semiannually is 1.8061112. Therefore, our total amount is 1.8061112*900 = 1625.50 and interest earned is 1625.50-900 = 725.50.

The factor that we need to multiply with 900 in order to get amount for compounded semiannually is 1.8140184. Therefore, our total amount is 1.8140184*900 = 1632.62 and interest earned is 1632.62-900 = 732.62.