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Compounding Interest MathEven though you could put information for compounding interest into a calculator, you should understand the mechanics behind it. Below are three story problems, the first will be done for you, as an example. You will need to complete the last two. Make sure to round your numbers up.Problem 1: You invested $52,400 at 6% compounded annually for 5 years What is your total on this investment?COMPOUNDING PERIODS= TIME * AMOUNT OF TIMES COMPOUNDEDExample=10, compounded quarterly= 10*4= 40 periodsCOMPOUNDINGPERIODSPRINCIPALRATEINTERESTEARNEDNEWVALUE1$52,400.006%$3,144.00$55,544.002$55,544.00$3,332.64$58,876.643$58,876.64$3,532.60$62,409.244$62,409.24$3,744.55$66,153.795$66,153.79$3,969.23$70,123.02Problem 2: You borrow $10,400 for 2 years at 12.7% and the interested is compounded semi-annually. What is the total you will pay back? Make as many periods as you POUNDINGPERIODSPRINCIPALRATEINTERESTEARNEDNEWVALUE2$10,40012.7%2904.03$13304.03Problem 3: You have $10,000 to invest and are decided between two different savings options. Figure out which one is better and put a star by it.Invest at 6%, compounded annually for 3 POUNDINGPERIODSPRINCIPALRATEINTERESTEARNEDNEWVALUE1231000010600112366%600636674.16106001123611910.16Invest at 6%, compounded semi-annually for 2 POUNDINGPERIODSPRINCIPALRATEINTERESTEARNEDNEWVALUE21000061255.0911255.09 ................
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