Olivia wants $1500.00 in 2 years at an interest rate of 4 %/a compounded semi-annually. How much should she invest

Answer 1

A = P(1+r/n)^nt t= years. r= interest rate, n= number of times compounded per year

1500 = P(1+.04/2)^2(2)

1500=P(1.02)^4

P = 1500/(1.02)^4

Amoundt invested = $1385.77 to get $1500 in 2 years at 4% semi-annual compounding