How do you figure out compound future value!!!

Time 3 years

Principal $2,000

Rate 12%

Compounded Semiannually

Amount ?

Interest ?

Could someone give me any idea how to figure this out.

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- November 23rd 2005, 02:45 PMjjen1978help!!!
How do you figure out compound future value!!!

Time 3 years

Principal $2,000

Rate 12%

Compounded Semiannually

Amount ?

Interest ?

Could someone give me any idea how to figure this out. - November 24th 2005, 05:46 AMctelady
How do you figure out compound future value!!!

Time 3 years

Principal $2,000

Rate 12%

Compounded Semiannually

Amount ?

Interest ?

We need to convert the annual interest into the rate for each period of compounding: The semiannual interest = .06

There are 6 semiannual compounding periods in 3 years

FV= P(1+k)^n

FV = 2000(1.06)^6

To find the interest, subtract the future value minus principal invested.