Part V: Compound Interest Periodic Compound Interest is interest (earned or paid) calculated at a regular time interval on the current principle as well as previously accrued interest The formula used to calculate periodic compound interest is: 4-future value P - present value (principle) rannual interest rate (as a decimal) -compounding (number of times per year that interest is added) -time (in years) 17. Suppose you are going to make a one-time investment of $10,000 into a retirement account carning 4% interest compounded annually. Use the format above to write an equation that can be used to find how much money will be in the retirement account after years. Then complete the table. (Round to the nearest penny.) 1 0 1000 121 0.5 10,143.04 Formula: AD 10000 (01.04) P-10 poo c=4 0.04 1 10,400 A 2 10,816 20 211911.73 1 18. Suppose you are going to make a one-time investment of $10,000 into a retirement account earning 4% interest compounded semi-annually. Use the format above to write an equation that can be used to find how much money will be in the retirement account after t years. Then complete the table. (Round to the nearest penny.) P=10000 022 0 10 000 0.5 10.1-00 Formula: A = 101000 (s.cz) at 1 ra=4% 10,404 2 10, G12 20 10,874 A - 10,000 9 = 19,000 (1.00) et Compare the calculations in #17 and #18. If the interest is added semi- annually does this mean that we earn a total of 8% per year? Explain. Why do we earn more money when the compounding is semiannually