The total amount with annual compounding is 23,304.79 .
The interest with annual compounding is $18,304.79.
The total amount with semi annual compounding is 24,005.10.
The interest with semi annual compounding is $19,005.10.
The total amount with quarterly compounding is 24,377.20.
The interest with quarterly compounding is $19,377.20.
What are the total amount and interest?
The formula for determining the total amount is:
FV = PV(1 + r/m)^nm
Where:
- FV =total amount
- PV = amount deposited
- r = interest rate
- n = number of years
- m = number of compounding
Interest = FV - amount deposited
FV = 5000 x (1.08)^20 = 23,304.79
Interest = 23,304.79 - 5000 = $18,304.79
FV =5000 x (1.08/2)^(2 x 20) =24,005.10
Interest = 24,005.10 - 5000 = $19,005.10
FV =5000 x (1.08/4)^(20 x 4) =24,377.20
Interest = 24,377.20 - 5000 = $19,377.20
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