Solve the following exercises and word problems using formulas.
Principal  Time Period (years)  Nominal Rate

InterestCompounded  CompoundAmount  CompoundInterest 
28.  $3,425  11  6.6  monthly 
To calculate: The compound amount and the compound interest for an investment with principal
Given Information:
An investment with principal
Formula used:
Compounding period can be defined as the duration or length of time from one interest payment to the next. If an investment made for 4 years at
Here, m is the period per year.
The interest rate per period can be calculated by dividing the annual, or nominal, rate by the number of periods per year,
Compound interest formula:
Compound amount
Here, the principal
Compound Interest:
It can be calculated by subtracting the principal from compound amount.
Steps for solving the compound interest formula:
Step I: Add
Step II: raise to the nth power to the resultant step 1 by using the
Step III: Multiply the resultant of step 2 by the compound amount
Calculation:
Consider an investment with principal
Since, the variablescompound amount, time period (years), nominal rate and interest compounded are given; therefore, the compounding period can be calculated as below:
Substitute the values in the formula for interest rate per period and simplify,
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