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Q: 5 percent interest compounded annually means percent paid every?
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How many years will it take for 8000 to double at a simple interest rate of 6 percent?

6% of 8,000 = 480 Since interest is not compounded, you just keep getting 480 paid once every year. Mathematically, it takes 8,000/480 = 162/3 years to earn another 8,000. But the final payment isn't paid until the end of the 17th year. Until that moment, you've only collected 7,680. Then, at the end of the 17th year, you get the payment that brings the interest to a total of 8,160. Note that if the interest had only compounded annually ... you leave the interest in the account, and at the end of next year, 6% is paid on the total in the account ... it would double in only 12 years.


How much would 900 invested at 6 percent interest compounded continuously be worth after 4 years?

At 6% interest, the total amount of money increases by a factor of 1.06 (100% + 6%) every year, so to get the amount after 4 years, you calculate 900 x 1.064.


What does quarterly mean in compounded interest?

It means that the interest is paid out every three months (quarter year). That means that the interest paid out after 3 months is earning interest for the remaining nine months. The quarterly interest rate is such that this compounding is taken into account for the "headline" annual rate. As a result, if the quarterly interest is taken out, then the total interest earned in a year will be slightly less than the quoted annual rate.


How much would 300 invested at 7 interest compounded continuously be worth after 4 years Round your answer to the nearest cent. Do not include units in your answer.?

7% compound interest means that the amount of money increases, every year, by a factor of 1.07. After 4 years, you have 300 x 1.07^4.


How much would 120 invested at 6 percent interest compounded monthly be worth after 21 years Round your answer to the nearest cent?

120 x (1.0621). You need a calculator with logarithms to solve this quickly. Take the log of 1.06, multiply that by 21 then take the antilog. The answer should be close to 3.4 I have 3.995636 which would give 407.95 to the nearest cent. Later: Sorry, this is based on annual compounding. For monthly the equation is 120 x (1.005252). You're on your own, I'm afraid! * * * * * The second part of the above answer is correct if this is purely a mathematical exercise. However, 6% compounded monthly is an annual interest rate of approx 101.2%. If you know anyone who gives even a tenth of that rate I would be interested to know! What happens, in real life, is that the financial company advertises the annual equivalent rate of their monthly rate. So, a 6% rate, compounded monthly, is really 0.487% monthly. This is because 0.487% compounded 12 times is 1.0048712 = 1.06, or 6% per annum. Then the real life problem reduces to 6% per annum for 21 years, which is 120*(1.06)21 = 407.95 - as in part 1 of the above answer. * * * * * The last paragraph above is incorrect. As was stated in the first answer, that would be for annual compounding. To calculate 6% per annum (which is what we usually mean by interest rates) compounded monthly, you first convert the interest rate to a monthly rate by dividing by 12, and that of course is half a percent per month, so every month the balance is multiplied by 1.005. So the answer of 120 x (1.005252) given there is correct. On the scientific calculator on my computer, I get $421.72.

Related questions

Does Interest Compounded semi-annually double every year?

No.


How much interest will 900 earn in one year at 4.75 percent?

4.75 percent of 900 is 42.75 . A few pennies more if the interest is compounded at any time during the year. For example, if interest is compounded every month, then you have 43.69 at the end of the year.


If you invest 750 every six months at 8 percent compounded semi annually how much at the end of ten years?

$22334


What is 2000.00 for 4 years compounded daily at 2.25 percent apr?

APR stands for annual percentage rate. That being the case, it does not matter whether the interest is compounded every day or every millisecond. The effect, at the end of a year is interest equal to 2.25 percent. So, 2000 at 2.25 percent compounded, for 4 years = 2000*(1.0225)4 = 2000*1.093083 = 2186.17


How much money will 500 dollars accumulate over 20 years at 5 percent interest?

That depends on whether you are getting 5% simple interest, or compound interest, and how often it is compounded. Simple interest is very easy to calculate; you just multiply. $500 at 5% earns 5% of $500 every year, which is $25, so in 20 years the interest earned is 20 x $25 or $500, for a total of $1,000. But if you put the money in a savings account in a bank, you get compound interest. It can be compounded annually, semi-annually, quarterly, monthly, or daily. The more often it is compounded, the more you earn. Nowadays you can get daily interest, but that is kind of complicated because it depends on whether you figure the interest for every single day, 365 days a year and 366 in a leap year, or the traditional banking custom of 360 days a year. For example, if you compound annually, every year your balance is multiplied by 1.05, so after 20 years you would have 500 x 1.0520, which is $1.326.65 to the nearest cent.


If you deposit 4000 in a bank account that pays 8 percent interest compounded annually how will you have in 6 years?

Annual interest calculates how much is in the bank at the time of compounding, then adds the percentage of interest. In this case, every year after the first slightly more than 8 percent of the 4 thousand initial deposit. In this particular case, at the end of the sixth year, you would have 6,347 dollars and 50 cents.


How much will 20k earn in 5 yrs if invested at 10 percent compounded semiannually?

If every six months the capital earn 10% interest which is compounded, at the end of 5 years, the interest will be 31875. If the annual interest rate is 10%, it makes no difference how often it is compounded. The six monthly interest rate is adjusted - to 4.88% rather than 5% - so that the total interest for a year is 10%.


What amount would you have after 10 years by in investing 500 every month and the investment earns 14 percent which is compounded quarterly?

You would have 2,294,862.92.However, 14% each quarter, compounded quarterly, is equivalent to 68.9% annually. You are unlikely to find such a return legitimately.


What is the term for interest that is compounded every three months?

Quarterly.Quarterly.Quarterly.Quarterly.


What is compound interest semiannually?

Interest is compounded semiannually if the interest is calculated every six months and added to the capital.


What is the present value of 8000 in 6 years at 10 percent?

Given:Initial Investment = 8000Time = 10 yearsRate = 6% = .06Assumptions:Assuming compounded annually (i.e., every year, the investment is increased by 6%). I will also solve for compounded monthly.Formula and Variables:A = P[1+(r/n)]nt, where:A = total money after some timeP = Initial Amountr = Interest Rate as a decimal (annual)n = how many times interested is compounded per year (we are using 1)t = time in yearsFrom there, just plug in everything into the formula:A = P[1+(r/n)]ntA = (8000)[1+(.06/1)](1)(10)A = (8000)(1.06)10A ~= 14326.782because currency only goes to the cent, round to the centA = 14326.78 (if interest is compounded annually)If interest where compounded monthly:A = P[1+(r/n)]ntA = (8000)[1+(.06/12)](12)(10)A = (8000)(1.005)120A = 14555.17 (about 288.39 more than compounded annually)I've given you the formula, and two possible answers, all bolded. If your interested is compounded at another interval, just use the formula. Example, if interested is compounded quarterly, use n=4 instead.


What would be the amount of compound interest on 8000 invested for two years at 12 percent compounded semiannually?

Semiannually over two years is equivalent to 4 periods. If the interest is 12% every 6 months, then the amount of interest is It is 8000*[(1.12)4 -1] =4588.15