Answer:
His principal must be 6854 dollars.
Step-by-step explanation:
The compound interest formula is given by:
Where A is the amount of money, P is the principal(the initial sum of money), r is the interest rate(as a decimal value), n is the number of times that interest is compounded per unit t and t is the time the money is invested or borrowed for.
Semi-annually compounding means that the money is compounded twice a year.
In this problem, we have that:
We want to find P. So
His principal must be 6854 dollars.