$\bf ~~~~~~ \textit{Compound Interest Earned Amount}
\\\\
A=P\left(1+\frac{r}{n}\right)^{nt}
\quad 
\begin{cases}
A=\textit{accumulated amount}\\
P=\textit{original amount deposited}\to &\$500\\
r=rate\to 6\%\to \frac{6}{100}\to &0.06\\
n=
\begin{array}{llll}
\textit{times it compounds per year}\\
\textit{semi-annually, thus twice}
\end{array}\to &2\\
t=years\to &2
\end{cases}
\\\\\\
A=500\left(1+\frac{0.06}{2}\right)^{2\cdot 2}\implies A=500(1.03)^4\implies A=562.754405$

now, "A" is the accumulated amount, including the earned interest, how much interest was it earned? well, is just A - P.

3 0

2 years ago

Lance Brothers Enterprises acquired $770,000 of 5% bonds, dated July 1, on July 1, 2016, as a long-term investment. Management h

enot [183]

Answer:

Cash (2.00% × $770,000) = $15,400

Interest revenue (2.50% × $690,000) = $17,250.

Discount = 770,000 - 690,000 = 80,000

Date General Journal Debit Credit

July 1, 2016 Investment in bonds 770,000

Discount on bond investment 80,000

Cash 690,000

Dec 31, 2016 Cash 15,400

Discount on bond investment 1850

Interest revenue 17,250

4 0

2 years ago