Question 383497
will pay $5000 in 15 years.
interest rate per year is 4.11% compounded semiannual.


formula to use is f = p * (1+i)^n


your time periods need to be semi-years.


because of that, you need to divide your interest rate by 2 and you need to multiply your  years by 2.


in your formula:


f = 5000
p = what you want to find
i = .0411 / 2 = .02055
n = 15 * 2 = 30


your formula becomes:


5000 = p * (1.02055)^30


your answer should be that you are willing to pay $2,716.072716 for the savings bond.


Let's see if that works.


1.02055^30 = 1.840893276


your formula becomes 5000 = p * 1.840893276


divide both sides of this equation by 1.840893276 and you get:


p = 5000 / 1.840893276 = $2,716.072716


We're good.