Podcast
Play an AI-generated podcast conversation about this lesson
Download our mobile app to listen on the go
Get App
Questions and Answers
What is the difference between the amount compounded annually and the amount compounded semi-annually after 4.5 years?
What is the difference between the amount compounded annually and the amount compounded semi-annually after 4.5 years?
- $8000 \left(1 + \frac{10}{100}\right)^{4.5} - 8000 \left(1 + \frac{10}{100}\right)^{2 \times 4.5}$
- $8000 \left(1 + \frac{10}{2 \times 100}\right)^{4.5} - 8000 \left(1 + \frac{10}{100}\right)^{2 \times 4.5}$
- $8000 \left(1 + \frac{10}{2 \times 100}\right)^{4.5} - 8000 \left(1 + \frac{10}{2 \times 100}\right)^{2 \times 4.5}$
- $8000 \left(1 + \frac{10}{100}\right)^{4.5} - 8000 \left(1 + \frac{10}{2 \times 100}\right)^{2 \times 4.5}$ (correct)
What is the effective annual rate when the interest is compounded semi-annually at 10%?
What is the effective annual rate when the interest is compounded semi-annually at 10%?
- $\left(1 + \frac{0.10}{2}\right)^2 - 1$ (correct)
- $\left(1 + 0.10\right)^2 - 1$
- $\left(1 + \frac{0.10}{2}\right) - 1$
- $\left(1 + 0.10\right) - 1$
What is the future value of an investment of $8000 after 3 years when the interest is compounded annually at 8%?
What is the future value of an investment of $8000 after 3 years when the interest is compounded annually at 8%?
- $8000\left(1 + \frac{8}{100}\right)^3$ (correct)
- $8000\left(1 + \frac{8}{3\times100}\right)^3$
- $8000\left(1 + \frac{8}{100}\right)^{3/12}$
- $8000\left(1 + \frac{8}{12\times100}\right)^3$
Flashcards are hidden until you start studying
