Question

Find compound amount:$45,000 at 6% compounded semiannually for 5 years

Answer 1

Remember that

The compound interest formula is equal to

`A=P(1+(r)/(n))^(nt)`

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest in decimal

t is Number of Time Periods

n is the number of times interest is compounded per year

in this problem we have

P=$ 45,000

r=6%=0.06

n=2

t=5 years

substitute in the given formula

`A=45,000(1+(0.06)/(2))^(2\cdot5)`
`\begin{gathered} A=45,000(1.03)^(10) \\ A=\$60,476.24 \end{gathered}`