Question

An investment of $900 earns 6% annual interest and is compounded semi-annually. Write an equation

Answer 1

Answer:

$A=900(1+\frac{0.06}{2})^{2(t)}$

Step-by-step explanation:

Lets use the compound interest formula provided to solve this:

$A=P(1+\frac{r}{n} )^{nt}$

P = initial balance

r = interest rate (decimal)

n = number of times compounded annually

t = time

First, change 6% into a decimal:

6% -> $\frac{6}{100}$ -> 0.06

Since the interest is compounded semi-annually, we will use 2 for n. Lets plug in the values now and your equation will be:

$A=900(1+\frac{0.06}{2})^{2(t)}$