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Q: How much interest will 20000 earn in two years if invested at 6 percent compounded semiannually?

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After 5 years, 20000 at 7% per annum compounded semiannually will be 20000*(1 + 0.5*7/100)2*5 = 20000*(1.035)10 = 28211.98

500 invested for 5 years at 7% interest compounded annually becomes 701.28

1000 x (1.025)8 which is $1218.40.

674.43

396.93

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888.15

1200

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

13.96%

It is 1.135^2 - 1 = 28.8%

I haven't gotten the answer to that test question either....the choices seem wrong

It is 20000*(1.07)^60 = 1158928.54

It will be 726.

$1480.24

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%.

The annual equivalent rate is 15.5625%. The amount invested is irrelevant to calculation of the equivalent rate.

After 5 years, 20000 at 7% per annum compounded semiannually will be 20000*(1 + 0.5*7/100)2*5 = 20000*(1.035)10 = 28211.98

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