Calculate the amount for each section using compound interest.

A) $1000 invested at 3%/a compounded semiannually for 8 years

B) $5500 invested at 6%/a compounded monthly for 42 months

C) $1000 borrowed at 5%/a compounded quarterly for 5.5 years

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- September 25th 2008, 06:28 AMeuclid2compound interest
Calculate the amount for each section using compound interest.

A) $1000 invested at 3%/a compounded semiannually for 8 years

B) $5500 invested at 6%/a compounded monthly for 42 months

C) $1000 borrowed at 5%/a compounded quarterly for 5.5 years - September 25th 2008, 06:32 AMmasters
Study this. Then apply it to your set of problems.

**Compound Interest Formula**

**P**= principal amount (the initial amount you borrow or deposit)

**r**= annual rate of interest (as a decimal)

**t**= number of years the amount is deposited or borrowed for.

**A**= amount of money accumulated after n years, including interest.

= number of times the interest is compounded per year**n**

**Example:**

An amount of $1,500.00 is deposited in a bank paying an annual interest rate of 4.3%, compounded*quarterly*. What is the balance after 6 years?

**Solution:**

Using the compound interest formula, we have that

= 1500,**P**= 4.3**r***/*100 = 0.043,= 4,**n**= 6. Therefore,**t**

So, the balance after 6 years is approximately $1,938.84.