Posted by Benjie on Wednesday, June 18, 2008 at 3:29pm.
The compound interest derives from
I = P[(1 + i)^n - 1] where P = the amount invested, i = the decimal equivalant of the periodic interest rate and n = the number of interest bearing periods.
Therefore, P = 8000, i = 6/100(12) = .015 and n = 4.
I = 8000[(1 + 6/100(4))^4 - 1]
I = 8000[1.015^4 - 1]
I = 8000[1.06136 - 1] = $490.91 = $491
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