Answer: $2926.05
Step-by-step explanation:
Compounded interest follows the formula:
P(1 + r/n)^nt where P = principle, or starting contribution, R = Rate (Percentages converted to decimals), N = number of compounds per year, and T = number of years.
The Principle would be $2500
The Rate would be 2.64% or 0.0264
N would be 2, since it is semiannual
T would be 6, since this lasts 6 years.
When we plug it in, we see
2500(1 + (.0264/2))^(2)(6)
= 2926.053
In a real situation in the bank, they would give you $2926.05
