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You deposit $1,200 in a bank account that pays 9% stated annual interest compounded semi-annually. What is the value of your investment at the end of 4 years?

User Geofflee
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Final answer:

To find the value of your investment at the end of 4 years, use the formula for compound interest: A = P(1 + r/n)^(n*t), where A is the final amount, P is the principal amount, r is the annual interest rate, n is the number of times the interest is compounded per year, and t is the number of years. In this case, the value of your investment is $1,694.68 when compounded semi-annually at a 9% annual interest rate for 4 years.

Step-by-step explanation:

To find the value of your investment at the end of 4 years, we can use the formula for compound interest: A = P(1 + r/n)^(n*t), where A is the final amount, P is the principal amount, r is the annual interest rate, n is the number of times the interest is compounded per year, and t is the number of years. In this case, P is $1,200, r is 9% (0.09), n is 2, and t is 4. Plugging these values into the formula, we get A = 1200(1 + 0.09/2)^(2*4) = 1200(1 + 0.045)^8 = 1200(1.045)^8 = $1,694.68.

User Fuzzy
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