Question20Max. score: 4.00John offers 5% compound interest to Bob on a biannual basis. Bob deposits 3200 dollars each on 15th June and 15th December of a year. Determine the amount Bob would have gained by interest.6642332136424642
Question
Question20Max. score: 4.00John offers 5% compound interest to Bob on a biannual basis. Bob deposits 3200 dollars each on 15th June and 15th December of a year. Determine the amount Bob would have gained by interest.6642332136424642
Solution
To determine the amount Bob would have gained by interest, we need to calculate the compound interest for each deposit and then add them together.
Step 1: Calculate the interest for the first deposit on 15th June. The principal amount is $3200 and the interest rate is 5% per annum. Since the interest is compounded biannually, we need to divide the interest rate by 2 and calculate the interest for 6 months. Interest = Principal * (1 + (Rate/100))^Time - Principal Time = 6 months = 0.5 years Interest = 3200 * (1 + (5/100))^0.5 - 3200
Step 2: Calculate the interest for the second deposit on 15th December. The principal amount is again $3200 and the interest rate is still 5% per annum. Since the interest is compounded biannually, we need to divide the interest rate by 2 and calculate the interest for 6 months. Interest = Principal * (1 + (Rate/100))^Time - Principal Time = 6 months = 0.5 years Interest = 3200 * (1 + (5/100))^0.5 - 3200
Step 3: Add the interest from both deposits to find the total interest gained. Total Interest = Interest for first deposit + Interest for second deposit
Step 4: Calculate the total amount gained by interest. Total Amount Gained = Total Interest + Total Principal (3200 + 3200)
Now, you can substitute the values and calculate the final answer.
Similar Questions
ohn offers 5% compound interest to Bob on a biannual basis. Bob deposits 3200 dollars each on 15th June and 15th December of a year. Determine the amount Bob would have gained by interest.6642332136424642
David invested $3200 under a compound interest of 16% per annum in JAKE Investment Bank. If the interest rate was compounded half-yearly, then find the amount received by him after a year. Ops: A. $4230.8 B. $3214.5 C. $4370.4 D. $3732.48
Alex invested $8000 at 5% pa simple interest for 2 years.How much extra interest would Alex have earned if he had invested his money at 5% pa compound interest?
Paula has a client who wants to invest into an account that earns 4% interest, compounded annually. The client opens the account with an initial deposit of $4,000, and deposits an additional $4,000 into the account each year thereafter.Assuming no withdrawals or other deposits are made and that the interest rate is fixed, the balance of the account (rounded to the nearest dollar) after the eighth deposit is __________.a.)$188,247b.)$102,713c.)$36,857d.)$40,969
You invested $1,330 in an account that pays 4 percent simple interest. How much more could you have earned over a 4-year period if the interest had compounded annually?Group of answer choices$12.58$12.46$13.11$22.59$13.77
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.