Question

Find the total and the interestprincipal $3200rate 5 1/2 yearscompounded semiannually for 6 years

Answer 1

Remember that

The compound interest formula is equal to

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

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest in decimal

t is Number of Time Periods

n is the number of times interest is compounded per year

in this problem we have

P=$3,200

r=5 1/2 %=5.5%=0.055

t=6 years

n=2

substitute the given values

`A=3,200(1+(0.055)/(2))^(2\cdot6)`

A=$4,431.31 ------> the total

Find out the interest

I=A-P

I=4,431.31-3,200

I=$1,231.31 -----> interest