Question

A couple deposits $22,000 into an account earning 6% annual interest for 15 years, Calculate the future value of the investment if the interest is compounded
semiannually. Round your answer to the nearest cent.​

Answer 1

Answer: the future value of the investment is $53399.8

Step-by-step explanation:

We would apply the formula for determining compound interest which is expressed as

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

Where

A = total amount in the account at the end of t years

r represents the interest rate.

n represents the periodic interval at which it was compounded.

P represents the principal or initial amount deposited

From the information given,

P = $22,000

r = 6% = 6/100 = 0.06

n = 2 because it was compounded 2 times in a year.

t = 15 years

Therefore,

A = 22000(1 + 0.06/2)^2 × 15

A = 22000(1 + 0.03)^30

A = 22000(1.03)^30

A = $53399.8