SOLUTION: saver deposits 240000 in a bank which pays compound interest at 9.5% per annum half yearly. Find the amount in the bank at the end of one year.
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Question 1190901: saver deposits 240000 in a bank which pays compound interest at 9.5% per annum half yearly. Find the amount in the bank at the end of one year. Answer by Theo(13342) (Show Source):
You can put this solution on YOUR website! f = p * (1 + r) ^ n
f is the future value
p is the present value
r is the interest rate per time period
n is the number of time periods
formula becomes:
f = 240,000 * (1 + .095/2) ^ (1 * 2)
solve for f to get:
f = 263,341.5
the annual interest rate is divided by 2 to get the semi-annual interest rate
the number of years is multiplied by 2 to get the number of semi-annual periods.
the formula uses the rate, not the percent.
9.5% divided by 100 is a rate of .095.
