Question

_______ is the amount of a $3,000.00 annuity due at 12 percent compounded semiannually for 3 years.

A) $41,814.50
B) $22,180.50
C) $43,068.93
D) $334,321.00

Answer 1

To find the amount of a $3,000 annuity due at 12 percent compounded semiannually for 3 years, use the formula for compound interest: A = P(1 + r/n)^(nt). Plugging in the values, the amount of the annuity due is $22,180.50.

Step-by-step explanation:

To find the amount of a $3,000.00 annuity due at 12 percent compounded semiannually for 3 years, we can use the formula for compound interest:

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

Where:

• A is the amount
• P is the principal/lump-sum amount ($3,000.00)
• r is the annual interest rate (12% or 0.12)
• n is the number of times interest is compounded per year (2 for semiannual)
• t is the number of years (3)

Plugging in the values, we have:

A = $3,000(1 + 0.12/2)⁶ = $22,180.50

Therefore, the amount of the annuity due is $22,180.50.