maths-- compound interest

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find the compund interest on \$2500 for one year at 4% per annum compounded half-yearly.

which of these is correct?

\$2500(1 + 0.04)^2

or

\$2500(1 + 0.02)^2

The second one. 2500(1+.02)^2

Since the interest is compounded semi-annually you have to divide the annual rate of 4% by 2.

PS, the actual compound interest, which your question asks for, would really be 2500(1+.02)^2 - 2500

ok, thanks

• maths-- compound interest -

if investing 50,000 over 20 yrs at 3%apr with compouind interest figures semi-annually .figure using equation f(t)=p(1+r/n)nt

• maths-- compound interest -

do you times the nt by the equation results to get the answer

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find compound intrest if principal=2000,rate=20%per annum & time=2years3months

• maths-- compound interest -

A=4000,12years
r=4% compounded semiannually

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business takes a loan of \$40,000, set at 4% interest and will be paid off in 12 years. The bank wants to save the business money by calculatin the interest on a remaining balance basis in case he pays it off early. The annual payment si assumed to be \$3500 of principal and 1600 of interest. after the 1st year \$5540 is paid annually. What would be the total amount of interest paid?

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