I need help with this question.
1 answer:
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Compound Interest Formula:
P = initial investment of 20,000
r = interest rate (What we need to find)
n=number of compounding periods per year (Semiannually means twice per year)
A= Amount after t-years
Okay, let's plug it all in.
41,951 = 20000 (1 + r/2)^2(30)
41,951/20000 = (1 + r/2)^60
(41,951/20000 )^1/60 = 1 + r/2
(41,951/20000 )^1/60 - 1 = r/2
2( (41,951/20000 )^1/60 - 1 ) = r
0.02484539... = r
0.02484 * 100 = 2.48% rounded to the nearest hundredth of a percent
I hope I've helped! :)