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What sum of money will grow to $3698.46 in nine years at 9.4% compounded semi-annually?

The sum of money is $ __.

User Rikkles
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1 Answer

4 votes

Final answer:

The initial sum of money needed is $1813.33.

Step-by-step explanation:

To find the initial sum of money, we can use the compound interest formula:

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

where A is the future value, P is the principal amount, r is the annual interest rate, n is the number of compounding periods per year, and t is the number of years.

Plugging in the known values:

3698.46 = P(1 + 0.094/2)^(2*9)

Solving for P, the sum of money is $1813.33.

User Jonovos
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