You can
put this solution on YOUR website!Compounded semi-annually. P dollars is invested at annual interest rate r for 1
year. If the interest is compounded semi-annually, then the polynomial p(1+r/2)^2
represents the value of the investment after 1 year.
:
Rewrite this expression without parenthesis.
A = p(1+r/2)^2
:
FOIL (1+(r/2))*(1+(r/2)) to get rid of the exponent
A = p *(1 +
+
)
:
A = p (1 + r +
); cancel 2
:
Multiply what's inside the brackets by p
A = p + pr +
:
Evaluate the polynomial if P= $200 and r =10%.
Substitute for p and r in the above equation
:
A = 200 + 200*.10 +
:
A = 200 + 20 +
:
A = 220 +
:
A = 220 + .50
:
A = 220.50
:
:
Check solution on a calc: enter 200*(1+(.1/2))^2 = 220.5
