Question

Find the future value in interest earned if $8704.56 is invested for eight years at 4% compounded semiannually

Answer 1

The future value interest earned semiannually at a  compound rate of 4% is $7598.89.

To calculate the future value in interest earned, we use the of compound interest

What is compound interest?

Compound interest is the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods.

Formula:

• I = [P(1+r/100)ⁿ-P]...................... Equation 1

Where:

• I = Future interest
• P = Principle
• R = Rate
• n = Total time

From the question,

Given:

• P = $8704.56
• r  = 4%
• n = 2×8 = 16 semiannually

Substitute the values above into equation 1

• I = [8704.56(1+4/100)¹⁶-8704.56]
• I = 8704.56(1.04)¹⁶-8704.56
• I = 16303.48-8704.56
• I = $7598.89

Hence, the future value interest earned is $7598.89.

Learn more about compound interest here: brainly.com/question/24924853

#SPJ1