Question

An investment of $1,000 earns 3.7% interest and is compounded semiannually

Answer 1

$1037.34

Explanation:

We use the formula:

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

P = $1000

r = 3.7% = 0.037

n = 2

t = 1 year

We take

1000(1 + 0.037/2)^(2·1) = $1037.34

So, the answer is $1037.34