Jack has $500 to invest. The bank offers an interest rate of 6% twice a year. How much money will jack have after 3 years? 10 years?

Question

Use the following formula

A=P(1+r/n)^nt

Answer 1

Confusion...

6% annually --> 3% per half year

But the way it's worded it sound like 6% every half year which is 12% annually. That is unreal.

Please be careful

500 ( 1 + 3%)^6 <--- 6 accumulations of interest in 3 years at 3% each.

500(1.03)^6

=597.03

500(1.03)^20 = 903.056

Those are your answers.....

Out of curiosity, for the funds to double it will take

(1.03)^t = 2

t * log(1.03) = log 2

t = log 2 / log 1.03 = 23 1/2 years