SOLUTION: If $3000 is invested at an interest rate of 5% each year, find the amount of the investment at the end of 4 years for the following compounding methods.
B)semiannually, which is
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Question 591829: If $3000 is invested at an interest rate of 5% each year, find the amount of the investment at the end of 4 years for the following compounding methods.
B)semiannually, which is six months, but it is also half a year, so I'm not sure which variable this is, as well as what number it is.
Note: I know that the formula I need to use is this: A(t)= P[1+(r/n)]^nt
Initially I tried plugging in the values: A(t)= 3000(1+0.05/4)^4, this was just a guess (this is one is for Annually though). I couldn't figure that one out, but since I think B) might be harder I tried that one. I had no success getting the right answer. I'd appreciate your help on this one, Thank you so much.
Answer by jim_thompson5910(35256) (Show Source): You can put this solution on YOUR website!
Start with the compound interest formula
Plug in , , (since we're compounding twice a year) and .
Evaluate to get
Add to to get
Multiply and to get .
Evaluate to get .
Multiply and to get .
Round to the nearest hundredth (ie to the nearest penny).
So there is $3655.21 in the account after 4 years (where $3000 is invested at an interest rate of 5% each year and it's compounded semiannually).
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