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900 invested at 6% compounded semi-annually for 5 years what is the formula for that

Sagot :

Amount after 5 years is 1209.51

Explanation:

Principal = P = 900

rate = r = 6% = 0.06

time = t = 5 years

n = number of times compounded in a year

n = semi -annual = twice in a year

n = 2 times

FV = future value = amount after 5 years

We would apply the compound interest formula:

[tex]FV\text{ = P(1 +}\frac{r}{n})^{nt}[/tex]

inserting the values into the formula:

[tex]\begin{gathered} FV\text{ = }900(1\text{ + }\frac{0.06}{2})^{2\times5} \\ FV=900)(1+0.03)^{10} \end{gathered}[/tex][tex]\begin{gathered} FV=900(1.03)^{10} \\ FV\text{ = 900}(1.3439) \\ FV\text{ = 1209.51} \end{gathered}[/tex]

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