Question

What principal will amount to S3000 if invested at 3% interest compounded semiannually for 10 years?

Answer 1

$1661.03

Explanation:

Since this is compounded semiannually for 10 years, and semiannually means twice a year, 10*2=20 total times to be compounded. This means that if we start with principal amount p, our equation will look like

`p*(1+0.03)^(20) =3000`

Dividing both sides by
`(1+0.03)^(20)`, we get p=around 1661.03