Bunuel wrote:
How much interest will $2,000 earn at an annual rate of 8 percent in 1 year if the interest is compounded every 6 months?
(A) $160.00
(B) $163.20
(C) $249.73
(D) $332.80
(E) $2,163.20
Use answer choices
If the compound interest rate compounded yearly instead of every six months, interest earned would equal the simple interest rate.*
That would be (2000)(.08) = $160 in interest.
But this rate gets paid twice in one year. So the amount earned must be a little more than $160.
I would go straight
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