Use Compound Interest Formulas
Use the compound interest formulas A $$A = P \left( 1 + \frac { r } { n } \right) \text { and } A = P e ^ { r t } \text { to solve }$$
-Find the accumulated value of an investment of $2000 at 10% compounded semiannually for 7 years.
A)$3959.86
B)$3897.43
C)$2814.20
D)$3400.00

Question

Quizplus · Accepted Answer

The formula for compound interest is $A = P \left(1 + \frac{r}{n}\right)^{nt}$, where $P$ is the principal amount ($2000), $r$ is the annual interest rate (10% or 0.10), $n$ is the number of times the interest is compounded per year (2 for semiannually), and $t$ is the time the money is invested for in years (7). Plugging in the values: $A = 2000 \left(1 + \frac{0.10}{2}\right)^{2 \times 7} = 2000 \left(1 + 0.05\right)^{14} = 2000 \times (1.05)^{14} = $3959.86$.

Use Compound Interest Formulas Use the Compound Interest Formulas A A =

Use Compound Interest Formulas
Use the Compound Interest Formulas A A =