MYP Mathematics, Compound Interest

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MYP Mathematics, Compound Interest

Postby Lucas » Sun Mar 10, 2013 7:19 am

MYP Maths, Financial Mathematics, Compound Interest

How can we calculate the interest paid on a deposit of $6000 at 6% per annum compounded semi-annually for 2 years?

Thanks
Lucas
 
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Re: MYP Mathematics, Compound Interest

Postby miranda » Sun Mar 10, 2013 9:16 am

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! :) :D :lol:
miranda
 
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Re: MYP Mathematics, Compound Interest

Postby Lucas » Sat Apr 06, 2013 7:57 pm

thanks miranda!!
Lucas
 
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