The interest on $6,000 at 6% compounded semiannually for eight years is
A) $3,628.24
B) $3,682.02
C) $362.82
D) $13,628.20
E) None of these

Question

Quizplus · Accepted Answer

We can use the formula for compound interest:

A = P(1 + r/n)^(nt)

where:

A = the final amount
P = the principal (starting amount)
r = the annual interest rate (as a decimal)
n = the number of times the interest is compounded per year
t = the number of years

In this problem, we have:

P = $6,000
r = 6% = 0.06
n = 2 (compounded semiannually)
t = 8 years

Plugging in the values, we get:

A = $6,000(1 + 0.06/2)^(2*8)
A = $9,628.24

So the interest earned is:

I = A - P
I = $9,628.24 - $6,000
I = $3,628.24

Therefore, the answer is choice (A).

The Interest on $6,000 at 6% Compounded Semiannually for Eight