SOLUTION: APR 3.4%, interest is compounded semianually. With no additional deposits or withdrawals for a year, what will balance be after all interest is paid on the principal balance of $97

Algebra ->  Percentages: Solvers, Trainers, Word Problems and pie charts -> SOLUTION: APR 3.4%, interest is compounded semianually. With no additional deposits or withdrawals for a year, what will balance be after all interest is paid on the principal balance of $97      Log On


   

Question 734836: APR 3.4%, interest is compounded semianually. With no additional deposits or withdrawals for a year, what will balance be after all interest is paid on the principal balance of $9700. I would really appreciate some help understanding this, thanks!
Answer by Edwin McCravy(20067) About Me  (Show Source):
You can put this solution on YOUR website!

The compound interest formula is

P+=+A%281%2Br%2Fn%29%5E%28n%2At%29

Take out the A and put 9700 in its place:

P+=+9700%281%2Br%2Fn%29%5E%28n%2At%29

Take out the r and put 0.034 in its place:

P+=+9700%281%2B0.034%2Fn%29%5E%28n%2At%29

Take out the n and put 2 in its place (because the
word "semiannually" means twice a year.

P+=+9700%281%2B0.034%2F2%29%5E%282%2At%29

Take out the t and put 1 year in its place:

P+=+9700%281%2B0.034%2F2%29%5E%282%2A1%29

P+=+9700%281%2B0.017%29%5E2

P+=+9700%281.017%29%5E2

P = $10032.60

Edwin