Asked by Rhetori Thompson on Jun 04, 2024
Verified
Harold Lau will deposit enough money today so that his account will contain $20,000 in 10 years. The account will pay interest at 8% compounded semiannually. Compute the interest (in dollars) that Harold will earn during the 10 years. (Use Tables 16-1A&B or 16-2A&B or a calculator.)
Compounded Semiannually
This process involves the interest being calculated and added to the principal sum twice a year, leading to interest on interest.
Compound Interest
Interest determined on the original amount of a deposit or loan, incorporating all the earned interest from past periods as well.
- Determine the current financial assessment of impending amounts to satisfy particular fiscal objectives.
- Exercise financial tables or calculators to remedy challenges linked to the time value of money.
- Assess the quantity of compound interest accumulated on investments through time.
Verified Answer
AG
akhil gaddamJun 07, 2024
Final Answer :
0.08 ¸ 2 = 0.04; 2 ´ 10 = 20; $20,000 ´ 0.45639 = $9,127.80;
$20,000 - $9,127.80 = $10,872.20 interest
$20,000 - $9,127.80 = $10,872.20 interest
Learning Objectives
- Determine the current financial assessment of impending amounts to satisfy particular fiscal objectives.
- Exercise financial tables or calculators to remedy challenges linked to the time value of money.
- Assess the quantity of compound interest accumulated on investments through time.