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MYP Math, Financial Mathematics, Compound Interest

How can we calculate the interest paid on a deposit of $37,200 at 4% per annum compounded semi-annually for 5 years?

Thanks

How can we calculate the interest paid on a deposit of $37,200 at 4% per annum compounded semi-annually for 5 years?

Thanks

- Lucas
**Posts:**0**Joined:**Mon Jan 28, 2013 8:05 pm

MYP Mathematics, Financial Mathematics, Compound Interest

Compounded semi-annually means interest is added to the principal semi-annually.

The general compounding formula is:

and

where F is the future value of the investment, P the principal, r is the interest rate per compound period and n is the number of compounding periods.

Regarding your question about the interest paid we will use the following formula

Hope these help!

Compounded semi-annually means interest is added to the principal semi-annually.

The general compounding formula is:

and

where F is the future value of the investment, P the principal, r is the interest rate per compound period and n is the number of compounding periods.

Regarding your question about the interest paid we will use the following formula

Hope these help!

- nicole
**Posts:**0**Joined:**Mon Jan 28, 2013 8:10 pm

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