5.5: Calculating compound interest with non-annual periods) Calculate the amount of money that will be in each of the following accounts at the end of the given deposit period: Account Holder Amount Deposited Annuel Interest Rate Compounding Compounding Periods per Year (m) Periods (years) Theodore Logan III $1,000 10% 1 10 Vernell Coles 95,000 12 12 1 Tina Elliot Wayne Robinson Eunice Chung Kelly Cravens 8,000 12 6 2 120,000 8 4 2 30,000 10 15,000 12 23 2 4 3 3

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Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.