The Periods, Rate, Compounded amount and Total interest, for two year; principal, $1,250; interest rate, 4%; and compounded semiannually.
Answer to Problem 1ECP
The Periods is
Rate is
Compounded Amount is
Total interest is
Explanation of Solution
Formula used:
Calculation:
It is given that the Interest is compounded semiannually.
Hence, the
Substitute,
Hence, the number of periods is
Substitute,
Thus, the Rate of each period is 2%.
Note that, the no. of periods is 4 and the interest per period is 2%
Future value or Compounded value of $1 is $1.0824 with the help of Table 12.1.
Substitute,
Hence, the Compounded Amount is
Substitute,
Hence, the compound Interest is
Want to see more full solutions like this?
Chapter 12 Solutions
Practical Business Math Procedures
- Discrete Mathematics and Its Applications ( 8th I...MathISBN:9781259676512Author:Kenneth H RosenPublisher:McGraw-Hill EducationMathematics for Elementary Teachers with Activiti...MathISBN:9780134392790Author:Beckmann, SybillaPublisher:PEARSON
- Thinking Mathematically (7th Edition)MathISBN:9780134683713Author:Robert F. BlitzerPublisher:PEARSONDiscrete Mathematics With ApplicationsMathISBN:9781337694193Author:EPP, Susanna S.Publisher:Cengage Learning,Pathways To Math Literacy (looseleaf)MathISBN:9781259985607Author:David Sobecki Professor, Brian A. MercerPublisher:McGraw-Hill Education