John invested $20,000 in a finance company that pays compound interest at a rate of 1.8% per annum.Find the total amount of interest he would receive after 3 years if the interest is compounded...

1 Answer | Add Yours

embizze's profile pic

Posted on

The investment is $20,000 and it earns 1.8% annual interest rate compounded semiannually. How much interest after 3 years?

Let P be the principle -- then the amount of interest I is given by:

`I=P(1+r/m)^(nm)-P` where r is the annual interest rate, m is the number of compounding periods per year, and n is the number of years.





So the interest earned is $1104.59


We’ve answered 324,687 questions. We can answer yours, too.

Ask a question