Answer:
To determine the compound interest of a certain investment, the following formula should be used:
X = Initial value (1 + interest rate / number of compositions) ^ years x number of compositions
Thus, in the assumption of an investment of $ 1,000 with interest compounded daily at 3% for 8 years, the formula would be the following:
X = 1,000 x (1 + 3/365) ^ (8x365)
X = 1,271.24
On the other hand, in the case of an investment of $ 1,000 with compound interest every 6 months at 3% for 8 years, the formula would apply as follows:
X = 1,000 x (1 + 3/2) ^ (8x2)
X = 1,268.99
