Answer:
$2,911.30
Explanation:
The computation of interest on interest is shown below:-
Interest on interest
= $110,000 × (1 + 0.065)^4 - ($110,000 + ($110,000 × 0.065 × 4))
= $110,000 × 1.286466351 - ($110,000 + $28,600)
= $141,511.299 - $138,600
= $2,911.30
Therefore for computing the interest on interest we simply solve the above equation.
