Question

What will be the new balance on $5000 earning 3% compounded semiannually after 10y

Answer 1

Given:

Balance = P = $5000

Interesr rate = r = 3% = 0.03

Compounded semiannually, n = 2

Time = t = 10 years

so,

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

Substitute with the given values:

`\begin{gathered} A=5000\cdot(1+(0.03)/(2))^(2\cdot10) \\ \\ A=5000\cdot1.015^(20)=6734.275 \end{gathered}`

So, the answer will be $6734.275