SOLUTION: Nicole borrowed $8000 at a rate of 6%, compounded semiannually. Assuming she makes no payments, how much will she owe after 5 years? Do not round any intermediate computations, and

Algebra ->  Finance -> SOLUTION: Nicole borrowed $8000 at a rate of 6%, compounded semiannually. Assuming she makes no payments, how much will she owe after 5 years? Do not round any intermediate computations, and      Log On


   

Question 1169718: Nicole borrowed $8000 at a rate of 6%, compounded semiannually. Assuming she makes no payments, how much will she owe after 5 years? Do not round any intermediate computations, and round your answer to the nearest cent.
Answer by Theo(13342) About Me  (Show Source):
You can put this solution on YOUR website!
formula to use for this is f = p * (1 + r) ^ n
f is the future value
p is the present value
r is the interest rate per period.
n is the number of periods.

the present value is 8000
the rate per semi-annual time period is 6% / 2 = 3% / 100 = .03.
the number of semi-annual time periods is 5 years * 2 = 10.

the formula becomes f = 8000 * (1 + .03) ^ 10
solve for f to get:
f = 10751.33103.
round to nearest cent to get:
f = 10751.33

the $8,000 will grow to $10,751.33 at the end of the 5 year investment period.