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Sample Compounding Interest Questions

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Find the amount that should be set aside today to yield the desired future amount. Future amount needed, $7000, interest rate, 12%, compounding., Semiannually, investment time, two years. (see attached chart)

Dewey Sykes plans to open a business and four years when he retires. How much must he invest today to have $10000 when he retires if the bank pays 2% annually, compounded quarterly? (see attached chart)

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A guide for compounding interest problems

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QUESTION 1
Future amount = $7000
Interest rate = 12% compounded semiannually
Investment period = 2 years

Rate per period = 12%/2 = ...

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