SOLUTION: Compound Interest. Suppose that $750 is invested at 7% interest, compounded semiannually. a) Find the function for the amount to which the investment grows after t years. b) Fin

Question 830810: Compound Interest. Suppose that $750 is invested at 7% interest, compounded semiannually.
a) Find the function for the amount to which the investment grows after t years.
b) Find the amount of money in the account at t=1,6,10,15, and 25 years.
Please help!
Answer by KMST(5328) (Show Source): You can put this solution on YOUR website!
a) 7% anual interest compounded semiannually means that every 6 months
interest is added to the balance.
That is times the balance
After 6 months, you have
$=$=$ .
You started with $750, but the calculation is the same for any other number.
In 6 months the amount grows by a factor of .
Six month later, at the 1 year mark, that $ amount gets multiplied times again,
so after one year you have $.
That multiplication times happens every year, so after years you have
$=$

b) For , the amount is (rounded).
For , the amount is (rounded).
For , the amount is (rounded).
For , the amount is (rounded).

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