Scott invested 3,000 at 12% interest rate. if the interest is compounded semiannually, how does it affect the investment

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Explanation:

Compounding increases the principal amount or the invested amount.  Scott invested $3000, which earns 12% compound interest every six months. After every six months, the interest earned will be added to the amount invested, meaning the investment will be more than $3000.

After the lapse of the 'second' six months, the interest earned with be added to the new invested amount. Therefore, at the end of the first year,  the $3000 invested will be compounded or increased twice.

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