Determine the amount of an investment if $100 is invested at an interest rate of 5.5% compounded semi-annually for 6 years.

Question

Determine the amount of an investment if $100 is invested at an interest rate of 5.5% compounded semi-annually for 6 years.

Answer 1

The equation for this is:

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

A = Amount of the investment

P=Principal

r=rate

n=Number of compounding periods

t = time

For your problem

A =What you are solving

P=100

r=0.055

n=2

t = 6

A=100(1+0.055/2)^2*6

A=$138.48

Answer 2

A = 100(1 + (0.055/2))⁽²⁾⁽⁶⁾

Can you calculate and answer?