Question

The amount to which $5,000 would grow in ten years at 6% compounded semiannually.

Answer 1

Answer:

Amount = $ 9030.56

Step-by-step explanation:

Given: Principal value, P = $ 5000

          Rate, R = 6%

          Time, T = 10 years

To find: Amount when compounded semiannually

Semiannual means half yearly which implies interest to be calculated twice in a year.

$\implies R=\frac{6}{2}=3$ %

n ( no. of times interest to be applied ) = 2 × 10 = 20

using compound interest formula of calculating amount we get,

$A=P\times(1+\frac{R}{100})^n$

$A=5000\times(1+\frac{3}{100})^{20}$

$A=5000\times(\frac{103}{100})^{20}$

$A=5000\times1.80611123467$

$A=9030.55617335$

⇒ A = $ 9030.56

Therefore, Amount = $ 9030.56

Answer 2

A=p(1+i/k)^kn
A=5000(1+0.06/2)^2*10
A=9,030.56