Question

Find the future value, using the future formula and a calculator. (Round your answer to the nearest cent.)$901 at 3.5% compounded semiannually for 6 years

Answer 1

To calculate the future value we need to use the compound formula:

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

where P is the principal, r is the interest rate in decimal form, n is the number of times the interest is compound in any given time t.

In this case we have that P=901, r=0.035 and since the interest is compound semiannually this means that n=2. Finally t=6. Plugging this values into the equation above we have that:

`\begin{gathered} A=901(1+(0.035)/(2))^(2\cdot6) \\ A=1109.53 \end{gathered}`

Therefore the future value would be $1109.53