Question

Your interest rate is compounded semiannually.

Beginning Balance: $1265.31

Annual Interest Rate: 8%

What will your ending balance be after six months?

Answer 1

Answer: $1314.949

Explanation:

Since the interest is compounded semiannually with an annual interest rate of 8%, to write this as an expression would look like this:

`(1265.31)(1.08)^(t)`, where t is the number of years.

In this case, it's six months or 1/2 year.

So the equation would look like this:

`(1265.31)(1.08)^{(1)/(2) }`

Which equals approximately $1314.949