Question

Find the balance of $6,000 deposited at 6% compounded semi-annually for 3 years

Answer 1

Answer:

The balance will be $7,164.31.

Step-by-step explanation:

The compound interest formula is given by:

$A = P(1 + \frac{r}{n})^{nt}$

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.

In this problem, we have that:

$P = 6000, r = 0.06$

Semi-annually is twice a year, so $n = 2$

We want to find A when $t = 3$

$A = P(1 + \frac{r}{n})^{nt}$

$A = 6000(1 + \frac{0.06}{2})^{2*3}$

$A = 7164.31$

The balance will be $7,164.31.