Under certain​ conditions, Swiss banks pay negative interestdashthey charge you.​ (You didn't think all that secrecy was​ free?) Suppose a bank​ "pays" minus3.6​% interest compounded annually. Find the compound amount for a deposit of ​$280 comma 000 after 8 years.
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Part 1
The compound amount after 8 years is ​$
  
enter your response here.
​(Do not round until the final answer. Then round to the nearest cent as​ needed.)

The formula for compound interest is:

\[
A = P(1 + \frac{r}{n})^{nt}
\]

Where:
- $ A $ is the compound amount
- $ P $ is the principal (initial deposit)
- $ r $ is the annual interest rate (as a decimal)
- $ n $ is the number of times the interest is compounded per year
- $ t $ is the number of years

In this case:
- $ P = 280,000 $
- $ r = -0.036 $ (negative 3.6% interest)
- $ n = 1 $ (compounded annually)
- $ t = 8 $ years

We can substitute these values into the formula to find $ A $:

\[
A = 280,000 \times \left( 1 + \frac{-0.036}{1} \right)^{1 \times 8}
\]

Let's calculate it step by step.The compound amount after 8 years is approximately \$208,821.06.

Would you like further details or have any questions about this calculation?

Here are 5 related questions to deepen your understanding:
1. How would the compound amount change if the interest rate was -2% instead of -3.6%?
2. What would the compound amount be if the interest was compounded quarterly instead of annually?
3. How does a negative interest rate impact the future value of an investment?
4. What happens to the principal if the interest rate is -3.6% but compounded for 10 years instead of 8?
5. Can the compound interest formula be used for other types of investments with different interest rates?

**Tip**: In cases with negative interest rates, your deposit decreases over time, which is why the compound amount is lower than the initial principal!

Under certain conditions, Swiss banks pay negative interest—they charge you. Suppose a bank pays minus 3.6% interest compounded annually. Find the compound amount for a deposit of $280,000 after 8 years.

Find the compound amount for a deposit of $280,000 over 8 years at an annual interest rate of -3.6%, compounded annually. Learn how to use the compound interest formula step-by-step to account for negative interest rates.

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