Question

If $4527 is invested at 7.95% for 4 years, find the future value if the interest is compounded semi-annually. Round to thenearest cent.

Answer 1

If $4527 is invested at 7.95% for 4 years, find the future value if the interest is compounded semi-annually. Round to the

nearest cent.

Remember that

The compound interest formula is equal to

$A=P(1+\frac{r}{n})^{nt}$

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest  in decimal

t is Number of Time Periods

n is the number of times interest is compounded per year

in this problem we have

P=$4,527

r=7.95%=0.0795

t=4 years

n=2

substitute the given values

$A=4,527(1+\frac{0.0795}{2})^{2\cdot4}$$A=\ 6,183.61$

therefore

the answer is $6,183.61