Compound amount = $8867.39
compound interest = $1867.39
EXPLANATION
Given:
Principal(p) = $7000 Rate(r) = 0.12 Time(t) = 2 n= 4
We can calculate the compound amount(A) using the formula below:
[tex]A=P(1+\frac{r}{n})^{nt}[/tex]Substitute the values and evaluate.
[tex]A=7000(1+\frac{0.12}{4})^{4\times2}[/tex][tex]=7000(1+0.03)^8[/tex][tex]=7000(1.03)^8[/tex][tex]\approx8867.39[/tex]Hence, the compound amount = $8867.39
We proceed to find the compound interest.
A = P + I
⇒ I = A - P
= 8867.39 - 7000
=1867. 39
Therefore, the compound interest = $1867.39