Question

What is the accumulated value if the money is compounded semiannually?

Answer 1

Given:

$\begin{gathered} P=20,000 \\ t=6years \\ r=5.5\% \end{gathered}$

Required:

To find the accumulated value.

Explanation:

Consider

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

Here

$\begin{gathered} =20000(1+\frac{0.055}{2})^{2\times6} \\ \\ =20000(1+0.0275)^{12} \\ \\ =27,695.68 \end{gathered}$

Final Answer:

The accumulated value is $27,695.7