Question8: Using the Present Value Table on page 358 of your text to compute the present value (principal) for an investment with a compound amount of $20,000, a 30 moth term of investment, and a 14% nominal interest rate compound semiannually.

Question 9. What is the compound interest on the previous investment?

the amount of money

14% nominal rate compounded semi-annually for 30 months

---> i = .07 , n= 5 half-years

PV = 20000(1.07)^-5
= $14259.72

I am surprised that you are still using "tables" in the back of textbooks.
A modern calculator is so much more practical, and for critics of calculators, what is the difference between looking up a number in a book or punching keys on a calculator. In both cases "somebody or something" has done all the work for you anyway.

To find the present value using the Present Value Table, you need to locate the appropriate interest rate and term of investment. In this case, the interest rate is compounded semiannually.

1. Convert the annual interest rate to the semiannual interest rate: 14% / 2 = 7%.

2. Locate the row that corresponds to the 7% interest rate in the Present Value Table.

3. Find the column that corresponds to the number of periods. In this case, the investment term is 30 months, which is equivalent to 30 / 6 = 5 semiannual periods.

4. Intersect the row and column to find the present value factor. Let's say it is 0.612.

5. Calculate the present value by multiplying the compound amount ($20,000) by the present value factor: Present Value = $20,000 x 0.612.

Now, moving on to Question 9: To calculate the compound interest on the previous investment, you need to subtract the principal (present value) from the compound amount.

Compound Interest = Compound Amount - Present Value

In this case, the compound amount is given as $20,000.

Substitute the value of the present value that you calculated from Question 8 into the formula:

Compound Interest = $20,000 - Present Value

Now, plug in the value of the present value you found earlier to get the final answer for Question 9.