James deposited $10,000 into an account that earns 5.5% compound interest, compounded semiannually. How much interest will James earn after 10 years?

1 Answer
Jul 7, 2018

Interest: $7204.28

Explanation:

Given: deposits $10000 with 5.5% compound interest, compounded semiannually. Find the amount of interest earned.

Compound Interest formula:

A = P(1 + r/n)^(nt),

Where r = %/100, n = number of compoundings per year;

t = number of years, P = amount deposited and A = balance after the time period.

A = 10000(1 + 0.055/2)^(2*10) = $17204.28

Interest earned = A - P = $17204.28 - $10000 = $7204.28