Math to be answered

Question

P = $2500, r = 5.3%, t = 6 months

Answer 1

If this is compound interest the general formula is:

A =P(1+r/n)^nt where r=.053, t= .5 and n= number of times compounded in one year

t=time measured in years. 6 months = 1/2 =.5 years, r= annual interest rate=5.3% = 0.053

P = the amount you invest or deposit. A = the amount you have after compound interest

A=2,500(1+.053/n)^.5n

n=1 for annual compounding

n =2 for biannual compounding

n=12 for monthly compoundng

n=4 for quarterly compounding

n=365 for daily compounding

n= infinity for continuous compounding

for continuous compounding the formula becomes

A=Pe^rt

A=2,500(e^.053(.5))

A =2567135618 = $2,567.14 total return rounded to nearest cent, with $67.14 interest

IF it's just simple interest

then

A=2500(.053)(.5) = $2566.25 with interest of $66.25

that's if r = 5.3% = annual interest rate

if 5.3% means simple interest for 6 months

then

A=2500(.053) = $2632.50 with $132.50 interest

but usually the interest rate refers to annual interest.