Question

If $15,000 is invested at an interest rate of 2% per year, compounded semiannually, find the value of the investment after the given number of years. (Round your answers to the nearest cent.)

Answer 1

Answer:

Step-by-step explanation:

If $10,000 is invested at an interest rate of 2% per year, compounded semiannually, find the value of the investment after the given number of years. (Round your answers to the nearest cent.)

a)6 years

b)12 years

c)18 years

***

compound interest formula: A=P(1+r/n)^nt, P=initial investment, r=interest rate, n=number of compounding periods per year, A=amt after t-years.

For given problem:

P=10000

r=.02

n=2

t=6, 12, 18

..

A(6)=10000(1+.02/2)^2*6

A(6)=10000(1.01)^12=11,268.25

A(12)=10000(1.01)^24=12,697.35

A(18)=10000(1.01)^36=14,307.69