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.