If $500 is invested for 3 years at 7% compounded semiannually,then the compound interest at the end of the period is
A) $112.52.
B) $114.63.
C) $120.37.
D) $122.56.
E) $150.36.

Question

Quizplus · Accepted Answer

The correct answer is B.The formula for compound interest is A = P(1 + r/n)^(nt), where A is the final amount, P is the principal, r is the annual interest rate, n is the number of times per year that the interest is compounded, and t is the number of years.In this case, P = $500, r = 7%, n = 2 (since the interest is compounded semiannually), and t = 3. Plugging these values into the formula, we get:A = 500(1 + 0.07/2)^(2*3)= 500(1.035)^6= 500(1.2256)= $614.63The compound interest is the difference between the final amount and the principal, which is $614.63 - $500 = $114.63.

If $500 Is Invested for 3 Years at 7% Compounded