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5 September, 08:12

Pierre deposits $9,000 in a certificate of deposit that pays 8% interest, compounded semiannually. How much interest does the account earn in the first six months? What is the balance after six months?

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  1. 5 September, 09:20
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    P = $9,000, the principal

    r = 8% = 0.08, the interest rate

    n = 2, semiannual compounding

    After 6 months, the interest is

    9000 * 0.08 = $720

    The balance after 6 months is

    9000 + 720 = $9720

    Answer

    Interest = $720

    Balance = $9,720
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