SOLUTION:
Step 1:
In this question, we are given the following:
Step 2:
From the question, we can see that the formulae for compound interest is given as:
[tex]\begin{gathered} A\text{ = P( 1 + }\frac{R}{100})^{nt} \\ \text{where P = \$ }16,500\text{ } \\ R\text{ = 12\%} \\ T\text{ = 18 months = (}\frac{18}{12})\text{ years} \\ n\text{ = quarterly compounded = 4} \end{gathered}[/tex]
Calculating this, we have that:
From the calculations, we can see that the Amount after 18 months
[tex]\approx\text{ \$ 19, 701. 86 ( 2 decimal places)}[/tex]
Now, we can see that:
[tex]\begin{gathered} \text{Interest = Amount - Principal} \\ \text{Interest = 19701. 86 - 16,500} \\ \text{Interest = \$ 3201.86} \end{gathered}[/tex]
CONCLUSION:
From the above calculations, we can see that the Interest = $ 3201. 86
