Find the interest earned if RM 7,500 is invested for six years 6.4% compounded quarterly.
7500(1 + .064/4)^24 - 7500 = ....
At the end of every year for three years, RM 1,000 is invested in a account that offers 8% compounded annually. Find the account amount at the end of the three years.
To find the interest earned, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the total amount after interest
P = the principal amount (initial investment)
r = annual interest rate (in decimal form)
n = number of times interest is compounded per year
t = number of years
In this case, the principal amount is RM 7,500, the annual interest rate is 6.4%, compounded quarterly (n = 4) over a period of six years (t = 6).
Let's plug these values into the formula and calculate the interest earned.
A = 7500(1 + 0.064/4)^(4*6)
A = 7500(1 + 0.016)^24
A = 7500(1.016)^24
A = 7500(1.435065)
A ≈ RM 10,726.98
The total amount after interest is approximately RM 10,726.98.
To find the interest earned, we subtract the principal amount from the total amount after interest:
Interest earned = A - P
Interest earned = 10,726.98 - 7500
Interest earned ≈ RM 3,226.98
Therefore, the interest earned on an investment of RM 7,500 for six years at an annual interest rate of 6.4% compounded quarterly is approximately RM 3,226.98.
To find the interest earned on an investment, we can use the formula for compound interest:
A = P(1 + r/n)^(nt) - P
Where:
A = total amount after interest
P = principal amount (initial investment)
r = annual interest rate (in decimal)
n = number of times interest is compounded per year
t = number of years
In this case, we are given:
P = RM 7,500
r = 6.4% (converted to decimal, 6.4/100 = 0.064)
n = 4 (compounded quarterly, 4 times per year)
t = 6 years
Let's substitute these values into the formula:
A = RM 7,500(1 + 0.064/4)^(4*6) - RM 7,500
Now let's calculate this:
A = RM 7,500(1.016)^24 - RM 7,500
Using a calculator or Excel, we can calculate the value of (1.016)^24 as 1.17403.
A = RM 7,500 * 1.17403 - RM 7,500
A = RM 8,805.23 - RM 7,500
A = RM 1,305.23
The total amount after interest is RM 1,305.23. To find the interest earned, we subtract the principal amount:
Interest earned = Total amount - Principal amount
Interest earned = RM 1,305.23 - RM 7,500
Interest earned = RM 805.23
Therefore, the interest earned after 6 years with a 6.4% interest rate, compounded quarterly, on an investment of RM 7,500 would be RM 805.23.