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**euclid2** 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

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.

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

**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

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

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